2023-09-21 16:16:05
Oil prices rose slightly in a choppy market on Thursday, gaining as much as $1 a barrel after a Russian ban on fuel exports distracted from Western economic winds that had driven prices down $1 the barrel at the start of the session.
Gains were limited as global central banks signaled continued restrictive policy.
Brent futures for November delivery rose 6 cents, or 0.7 percent, to $93.59 at 11:46 a.m. EDT (1646 GMT). U.S. West Texas Intermediate (WTI) crude rose 36 cents, or 0.4%, to $90.02. Both benchmarks rose and fell by more than a dollar earlier in the day Thursday.
Russia has temporarily banned exports of gasoline and diesel to all countries outside a circle of four ex-Soviet states with immediate effect in order to stabilize the domestic fuel market, the government said on Thursday.
The shortage will force Russian fuel buyers to source elsewhere, prompting refiners to process more of a dwindling crude supply to meet demand, said Tamas Varga of oil broker PVM.
“The news about Russia emerged and the tightness of the long-term outlook immediately transferred to the supply side,” Vargas said, referring to optimistic signals from the US Federal Reserve.
On Wednesday, the Fed held interest rates steady but toughened its stance, forecasting a quarter-percentage-point increase to 5.50-5.75% by the end of the year.
This could dampen economic growth and overall fuel demand. The U.S. dollar rose to its highest level since early March, making oil and other commodities more expensive for buyers using other currencies.
Applications for unemployment benefits in the United States
have fallen
The U.S. Labor Department announced that applications for unemployment benefits fell to an eight-month low last week. John Kilduff, a partner at Again Capital LLC in New York, believes this is another factor that would favor high interest rates.
“The Fed’s stance and strong jobs market pushed stocks and commodities lower, putting pressure on oil,” Mr. Kilduff said.
The Bank of England followed the Fed’s lead and held interest rates on Thursday, after a long series of hikes, but said it was not taking the recent decline in inflation for granted.
Norway’s central bank raised its benchmark interest rate on Thursday and, to everyone’s surprise, said it would likely raise rates in December. Oil prices remained supported by concerns about insufficient global supply heading into the fourth quarter. U.S. crude inventories at Cushing, the WTI delivery hub, are at their lowest level since July 2022 and production cuts continue within the Organization of the Petroleum Exporting Countries and its allies. (Reporting by Paul Carsten and Natalie Grover in London and Laura Sanicola and Trixie Yap; Editing by Sonali Paul, Jane Merriman, Alexandra Hudson and David Gregorio)
1695313622
#Commodities #Oil #slightly #trading #choppy #Russias #ban #fuel #exports #boosts #economy #rate #hikes #weigh #Today