Investing.com-- Oil prices rose in Asian trade on Monday, extending mild gains from last week as traders watched for potential disruptions in Russian supply following Ukrainian drone attacks on Moscow's energy infrastructure.
Focus this week is also squarely on the Federal Reserve, which is widely expected to cut interest rates. The central bank's meeting comes amid growing concerns over weakening U.S. fuel demand.
Brent oil futures for November rose 0.4% to $67.26 a barrel, while West Texas Intermediate crude futures rose 0.5% to $62.72 a barrel by 22:15 ET (02:15 GMT).
Russia-Ukraine attacks keep oil supply fears in play
Oil prices added about 1% last week after Ukraine ramped up its attacks on Russian oil infrastructure, including its largest export terminal Primorsk and major refinery Kirishinefteorgsintez.
The strikes have the potential to take large amounts of Russian oil production offline, and could herald potential supply disruptions, especially for Moscow's top markets India and China.
Focus is also on the U.S.' attempts to deescalate the Russia-Ukraine war, although Moscow on Friday signaled that ceasefire talks with Ukraine had stalled.
The U.S. was last week seen seeking higher trade tariffs on China and India from the G7 countries, after Washington in late-August slapped 50% tariffs on India over its purchases of Russian oil.
More Western restrictions on the purchase of Russian oil stand to further limit global supplies, and appear likely with the war between Moscow and Kyiv showing few signs of ceasing.
Fed rate cut in focus this week
Oil markets also took some support from a softer dollar, as the greenback retreated in anticipation of an interest rate cut by the Fed this week.
A raft of weak labor market readings and mixed inflation data ramped up bets that the Fed had enough reason to resume its easing cycle from September.
Markets are pricing in a 96.4% chance the Fed will cut rates by 25 basis points and a 3.6% chance of a 50 bps cut, CME Fedwatch showed.
Lower rates tend to boost economic activity and could help support oil demand in the coming months.
The dollar also weakened on the prospect of lower rates, helping spur gains across commodities that are priced in the greenback.