Oil prices started the month with gains. Brent quickly made up for the 'losses' caused by the contract rollover and broke through the $68 per barrel mark during the course of the day. Due to Labor Day, US markets were closed on Monday, which reduces the significance of yesterday's price movements. Market participants continue to focus on possible supply disruptions from Russia, Commerzbank's commodity analyst Carsten Fritsch notes.

India resists growing US pressure

"The reasons for this are tougher US sanctions and mutual attacks by Russia and Ukraine on each others' energy infrastructure. The data on Russia's seaborne Oil exports, which is expected to be published by Bloomberg today, will provide insight into whether and to what extent this had an impact last week. In the previous week, shipments had fallen to a four-week low overall, with shipments to India falling to their lowest level in almost three years. It is quite possible that there will be a counter-movement."

"India appears unwilling to bow to growing pressure from the US government over its purchases of Russian Oil. The Indian energy minister defended the purchases, writing in an Indian daily newspaper that they had stabilized the market and prevented a significant price increase to as much as $200. There is still a financial incentive for Indian refineries to buy Russian Urals Oil. According to informed sources, this Oil is being offered at a discount of $3-4 per barrel compared to Brent for cargoes loaded at the end of September and in October."

"By comparison, Indian refineries recently had to pay a premium of $3 over Brent for US Oil. Meanwhile, Saudi Arabia and Iraq have stopped supplying Oil to an Indian refinery that has been placed on the EU sanctions list in July due to its Russian majority owners. The reason for the delivery stop is apparently payment issues, according to sources familiar with the matter. As a result, the refinery in question, which can process 400,000 barrels of crude Oil per day and thus accounts for nearly 8% of India's processing capacity, is now likely to be completely dependent on Oil imports from Russia. However, sources report that its utilisation rate has recently been only 70-80% due to the sanctions."