Ukraine drone attacks target Russian energy infrastructure
US vice president says Russia has made 'significant concessions' toward a settlement
Federal Reserve Chair Powell signals possible rate cut in September
Updates prices in paragraph 2; adds quote in paragraph 10
By Sam Li and Florence Tan
Aug 25 (Reuters) - Oil prices rose on Monday after Ukraine stepped up attacks on Russia, fanning concerns Russian oil supply could be disrupted, while expectations for a cut in U.S. interest rates buoyed the outlook for global growth and fuel demand.
Brent crude futures rose 13 cents, or 0.19%, to $67.86 at 0656 GMT, and West Texas Intermediate (WTI) crude futures gained 15 cents, or 0.24%, to $63.81.
Ukraine a drone attack on Russia on Sunday, which forced a sharp fall in the capacity of a reactor at one of Russia's biggest nuclear power plants and sparked a huge blaze at the Ust-Luga fuel export terminal, Russian officials said.
In addition, a fire at Russia's , caused by a Ukrainian drone attack, was burning for the fourth day on Sunday, the acting governor of the region said.
The refinery sells fuel mainly for export and has an annual capacity of 5 million metric tons of oil, or around 100,000 barrels per day.
"Given the success that Ukraine is having with its targeting of Russian oil infrastructure ... the risks for crude oil are shifting to the topside," IG market analyst Tony Sycamore said.
Meanwhile, U.S. Vice President JD Vance on Sunday that Russia has made "significant concessions" toward a negotiated settlement in its war with Ukraine.
"They've recognized that they're not going to be able to install a puppet regime in Kyiv. That was, of course, a major demand at the beginning. And, importantly, they've acknowledged that there is going to be some security guarantee for the territorial integrity of Ukraine," Vance said on NBC's "Meet the Press with Kristen Welker" program.
However, U.S. President Donald Trump also renewed threats on Friday that he would impose sanctions on Russia if there was no progress toward a peaceful settlement in Ukraine in two weeks.
Both benchmark prices seem to lack momentum despite the Fed’s hints at a September cut, which tends to improve the risk appetite. It appears markets are largely convinced that Trump's tariffs would prove more disruptive to economic growth, which currently keeps a lid on oil prices, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
Investors' risk appetite has improved after Federal Reserve Chair Jerome Powell on Friday signaled a at the U.S. central bank's meeting next month.
"A risk-on tone across markets boosted investor appetite across the commodities complex, aided by renewed supply-side issues across energy and metals," ANZ analysts said in a note.
(Reporting by Sam Li in Beijing and Florence Tan in Singapore; Editing by Sonali Paul, Christopher Cushing and Sharon Singleton)
((Sam.Li@thomsonreuters.com [Sam.Li@thomsonreuters.com];))
