Russia Eases Fuel Export Embargo

• Oil prices fell last week, snapping three-week rally
• Russia lifts export ban on low-quality diesel, marine fuel
• IIR: U.S. refiners’ weekly capacity seen down 324,000 bpd

Oil prices settle near flat in choppy trade; Russia eases fuel export ban, writes Stephanie Kelly and Nicole Jao.

Oil prices settled nearly flat in choppy trade

Oil prices settled nearly flat in choppy trade on Monday as Russia relaxed its fuel ban and investors eyed elevated interest rates that could curb demand.

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

U.S. West Texas Intermediate crude settled 35 cents lower at $89.68.

Crude prices fell last week after a hawkish Federal Reserve rattled global financial markets and raised concerns that interest rates could stay higher for longer, crimping oil demand. That snapped a three-week rally of more than 10% after Saudi Arabia and Russia constrained supply by extending production cuts to the end of the year.

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

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

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

Last week, Moscow issued a temporary ban on gasoline and diesel exports to most countries to stabilise the domestic market, fanning concerns of low products supply as the Northern Hemisphere heads into winter.

Also weighing on oil prices, the U.S. dollar index strengthened to its highest since November 2022. A stronger greenback makes U.S. dollar-priced oil more expensive for holders of other currencies, curtailing demand.

Number of operating oil rigs in the U.S. fell

“We seem to have risk-off sentiment because of strength in the dollar,” Price Futures Group analyst Phil Flynn said.

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

Compounding supply constraints, U.S. oil refiners are expected 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, research company IIR Energy said on Monday.

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

In Iran, an explosion was reported on Monday at Iran’s southern refinery of Bandar Abbas, 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 flagged that oil prices face technical resistance at the November 2022 highs reached hit last week.

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

Did you subscribe to our daily newsletter?

It’s Free! Click here to Subscribe!

Source: Reuters

• 
• 
• 
• 
• 
• 
• 
•