London
Oil prices remained relatively stable on Monday, with Brent crude futures up 0.18% at $93.44 a barrel and U.S. West Texas Intermediate (WTI) crude up 0.08% at $90.10. These prices came after a slight dip on Friday when Russia announced restrictions on fuel exports. The country has since relaxed its fuel export ban, which has eased concerns about supply constraints.
Last week, oil prices experienced volatility after the Federal Reserve’s hawkish stance on interest rates raised concerns about future demand. This followed a three-week rally driven by production cuts from Saudi Arabia and Russia, which tightened supply. Russia initially imposed a ban on gasoline and diesel exports to most countries to stabilize its domestic market, further fueling worries about product supply as winter approaches in the Northern Hemisphere.
In addition to supply concerns, the U.S. is facing challenges with operating oil rigs, as the number fell by eight to 507, the lowest count since February 2022, according to a report from Baker Hughes. U.S. oil refiners are also dealing with offline capacity, with approximately 1.7 million barrels per day (bpd) expected to be offline for the week ending September 29, reducing available refining capacity by 324,000 bpd.
Despite these factors, expectations of improved economic data from China, the world’s largest crude importer, have lifted sentiment. China’s manufacturing sector is anticipated to expand in September, with the purchasing manufacturing index expected to rise above 50 for the first time since March.
However, analysts have noted that oil prices may encounter technical resistance at the November 2022 highs reached last week, indicating potential challenges in sustaining recent gains.
