Oil Prices Settle Almost unchanged in choppy trade; Russia eases ban on fuel exports

Natalie Portman
By Natalie Portman 4 Min Read
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By Stephanie Kelly and Nicole Jao

NEW YORK (RockedBuzz via Reuters) – Oil prices remained roughly stable amid choppy trading on Monday as Russia eased its fuel ban and investors anticipated high interest rates that could dampen demand.

Brent crude futures settled 2 cents higher at $93.29 a barrel.

US West Texas Intermediate crude settled down 35 cents at $89.68.

Crude prices fell last week after the Federal Reserve’s hawkish stance rattled global financial markets and raised concerns that interest rates could remain higher for a longer period, limiting demand for oil. That triggered a three-week rally of more than 10% after Saudi Arabia and Russia restricted supply by extending production cuts through the end of the year.

“The market may still be grappling with the Fed keeping interest rates higher for a longer period of time, which may impact the demand side of the equation,” said Andrew Lipow, president of Lipow Oil Associates.

Russia has approved changes to its fuel export ban, lifting restrictions on fuel used as bunkering for some ships and high-sulphur diesel, a government document showed on Monday.

The export ban on all types of high-quality petrol and diesel, announced last Thursday, remained in place.

Last week, Moscow issued a temporary ban on gasoline and diesel exports to most countries to stabilize the domestic market, fueling concerns about tight supplies of the products as winter approaches in the Northern Hemisphere.

Also impacting oil prices, the U.S. dollar index strengthened to its highest level since November 2022. A stronger greenback makes U.S. dollar oil more expensive for holders of other currencies, reducing demand.

“It seems like we have a risk-off sentiment because of the strength of the dollar,” Price Futures Group analyst Phil Flynn said.

On the supply side, the number of operating oil rigs in the United States fell by eight to 507 last week – the lowest number since February 2022 – despite higher prices, a weekly report from Baker Hughes showed on Friday.

Compounding supply constraints, U.S. oil refineries are forecast to have about 1.7 million barrels per day (bpd) of capacity offline for the week ending Sept. 29, decreasing available refining capacity by 324,000 bpd, he said. research firm IIR Energy said on Monday.

Offline capacity is expected to increase to 1.9 million bpd in the week ending Oct. 6, IIR added.

In Iran, an explosion was reported at the southern Bandar Abbas refinery on Monday, according to the official IRNA news agency, following a gas leak.

Expectations of better economic data this week from China, the world’s largest crude importer, lifted sentiment. However, analysts have flagged that oil prices face technical resistance at the November 2022 highs reached last week.

China’s manufacturing sector is expected to expand in September, with the manufacturing purchasing index expected to rise above 50 for the first time since March, Goldman Sachs analysts said.

(Reporting by Stephanie Kelly and Nicole Jao in New York; additional reporting by Paul Carsten in London and Mohi Narayan and Florence Tan Editing by Louise Heavens, David Goodman, Bernadette Baum, Paul Simao and David Gregorio)

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