FILE PHOTO: A view shows oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer/File Photo

By Anjana Anil and Trixie Yap

(Reuters) - Oil prices edged up on Tuesday after rising in the previous session, as market participants contemplated potential supply disruption from Russia after Ukrainian drone attacks on its refineries.

Brent crude futures edged up 15 cents to $67.59 a barrel by 0354 GMT while U.S. West Texas Intermediate crude was at $63.45, also up 15 cents. On Monday, Brent settled up 45 cents at $67.44 while WTI settled 61 cents higher at $63.30.

Ukraine has intensified attacks on Russia's energy infrastructure in an attempt to impair Moscow's war capability, as talks to end their conflict have stalled.

"Heightened fears of supply disruptions from Russia, a key producer accounting for over 10% of global oil output" is helping oil prices, IG market analyst Tony Sycamore said in a client note.

U.S. Treasury Secretary Scott Bessent on Monday said the government would not impose additional tariffs on Chinese goods to encourage China to halt purchases of Russian oil unless European countries hit China and India with steep duties of their own.

"An attack on an export terminal like (Russia's) Primorsk is aimed more at limiting Russia's ability to sell its oil abroad, affecting export markets," said JP Morgan analysts.

"More importantly, the attack suggests a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices," they added.

Investors are also watching out for the U.S. Federal Reserve's September 16-17 meeting at which the bank is widely expected to cut interest rates. Lower borrowing costs could boost fuel demand.

"A weaker U.S. dollar, driven by expectations of a Federal Reserve rate cut this week, further supported crude oil," Sycamore said.

The U.S. dollar index, which measures the greenback's strength against six peers, slipped to a nearly one-week low. A weaker dollar makes oil less expensive for holders of other currencies.

Markets were also factoring in expectations of crude inventory declines in the U.S. last week, with official data expected on Wednesday at 1430 GMT.

U.S. crude inventories are forecast to fall 6.4 million barrels for the week ended September 12, following a 3.9 million build a week earlier, energy strategist Walt Chancellor at Macquarie Group said in a client note.

A Reuters poll of analysts on Monday showed U.S. crude oil and gasoline stockpiles were expected to have fallen last week, while distillate inventories likely rose. [EIA/S]

(Reporting by Anjana Anil in Bengaluru; Editing by Christopher Cushing)