(Bloomberg) -- Oil surged as simmering geopolitical tensions and the weakening dollar overshadowed bearish signals coming from internal market metrics.

West Texas Intermediate rose about 3% to trade near $69 a barrel after the US gave Ukraine the green light to use long-range missiles inside of Russia, amping up tensions between the warring nations. Crude also tracked equity markets higher, and a weaker dollar made raw materials priced in the currency more attractive.

Meanwhile, the two nearest futures for West Texas Intermediate crude are just a few cents away from flipping into a bearish contango structure — where front-month contracts are cheaper than those further along — for the first time since February. The so-called prompt spread traded at a premium of as narrow as 2 cents earlier on Monday, and a switch into a discount may be seen as a signal that supplies are outstripping near-term demand.

“While time spreads and demand concerns remain the foundation of the bearish narrative, they may take a backseat today as geopolitical developments dominate the spotlight,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “The concern with these headlines is that they could draw the US more directly into the conflict, potentially put Russian energy assets back at risk, and increase the likelihood of North Korea becoming more directly involved.”

Also supporting prices on Monday were reports the Chevron-led Tengiz venture in Kazakhstan cut daily oil production by as much as 30% this month amid maintenance.

Oil has swung between gains and losses in recent weeks, with hostilities in the Middle East raising fears of disruptions to supply. More recently, a stronger greenback has pressured prices, with the Bloomberg Dollar Spot Index rallying to the highest in more than a year last week.

To get Bloomberg’s Energy Daily newsletter into your inbox, click here.