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The oil price is stable, but rising production offsets the disruptions in Russia's supply

The oil prices were in a narrow range on Monday, as concerns about the rising production and the impact that U.S. Tariffs will have on demand outweighed supply disruptions caused by intensified airstrikes between Russia and Ukraine.

Brent crude dropped 12 cents or 0.18% to $67.36 a barge by 0046 GMT. U.S. West Texas intermediate crude was down 13 cents or 0.2% at $63.88 a barge. Due to the U.S. Bank Holiday, trading is expected to be muted.

Volodymyr Zelenskiy, the Ukrainian president, vowed to retaliate on Sunday by ordering further strikes in Russia following Russian drone attacks against power plants in northern and south Ukraine. Both countries have intensified their airstrikes over the past few weeks, focusing on energy infrastructure and disrupting Russian crude oil exports.

According to ANZ analysts, the markets remain concerned about Russian oil flow. Weekly shipments from Russian ports have dropped to a 4-week low of 2,72 million barrels a day.

The poll conducted on Friday indicated that oil prices will not rise much from their current levels in this year. This is because rising production from the top producers increases the risk of an excess, and U.S. Tariff threats are weighing on demand growth.

An official survey released on Sunday showed that China's manufacturing sector shrank for the fifth consecutive month in August. This suggests that producers are holding off amid uncertainty about a possible trade agreement with the U.S., and weak domestic demand.

Investors will be watching the meeting on September 7 between members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies to get more clues about the rising production from OPEC+.

According to the Energy Information Administration, U.S. crude production reached a record in June. It increased by 133,000 barrels a day, to 13,58 million bpd.

The U.S. Labor Market Report this week will provide a vital read on the health of the economy and test investors' belief that interest rates are soon to be cut. This view has boosted their appetite for riskier investments such as commodities. (Reporting and editing by Himani Sarkar; Florence Tan)

(source: Reuters)