Oil prices rose slightly on Monday after Ukraine intensified its attacks on Russia, stoking concerns about a possible disruption in Russian oil supplies, while expectations of lower US interest rates supported the outlook for global growth and demand for fuel.

Brent crude futures rose 3 cents, or 0.04%, to $67.76 at 03:42 GMT, and West Texas Intermediate (WTI) crude futures gained 7 cents, or 0.11%, to $63.73 GMT, and West Texas Intermediate (WTI) crude futures rose 7 cents, or 0.11%.

Ukraine launched a drone attack on Russia on Sunday, which caused a sharp drop in the capacity of a reactor at one of Russia's largest nuclear power plants and triggered a huge fire at the fuel export terminal in Ust-Luga, Russian officials said.

In addition, a fire at the Russian refinery in Novochakhtinsk, caused by a Ukrainian drone attack, was burning for the fourth day on Sunday, said the acting governor of the region.

The refinery sells fuel primarily for export and has an annual capacity of 5 million tons of oil, or about 100,000 barrels per day.

“Given Ukraine's success in targeting Russian oil infrastructure... the risks for crude oil are moving upward,” said Tony Sycamore, market analyst at IG.

Meanwhile, US Vice President JD Vance said that Russia had made “significant concessions” in preparation for a negotiated settlement in its war with Ukraine on Sunday.

They recognized that they could not install a puppet regime in Kiev. It was, of course, a major claim at the beginning.

“And more importantly, they recognized that there would be some security guarantee for Ukraine's territorial integrity,” Vance said on NBC's “Meet the Press with Kristen Welker.”

US President Donald Trump, however, on Friday renewed his threats to impose sanctions on Russia if no progress was made towards a peaceful settlement in Ukraine within two weeks.

Investor appetite for risk improved after Federal Reserve Chairman Jerome Powell reported a possible cut in interest rates on Friday at the US central bank meeting next month.

“A risk-friendly tone in the markets has boosted investor appetite in the commodity sector, helped by new supply issues in the energy and metals sectors,” ANZ analysts said in a note.