Oil prices headed for a weekly gain of about three percent, after achieving a strong increase on Friday, as the impact of strong demand during a holiday in China and continued scarcity in the United States overshadowed expectations of potential increases in supplies.
Brent crude futures for November, which expired on Friday, rose 88 cents, or 0.92 percent, to $95.43 per barrel, by 10:08 GMT.
US West Texas Intermediate crude increased $1.24, or 1.35 percent, to $92.95 per barrel.
Oil prices fell by about one percent on Thursday, as traders began selling to take profits after prices rose to their highest levels in ten months, and some worried that rising interest rates might affect demand for oil.
What supported prices were improved macroeconomic data from China, the world’s largest oil importer, in addition to strong demand for fuel during the country’s Golden Week holiday, which began on Friday and continues for a week.
“Increasing international travel during the Golden Week holiday boosts Chinese demand for oil,” ANZ Research said in a note.
A poll conducted by Reuters suggested that factory activity in China will stabilize in September, which adds to a series of indicators indicating that the second largest economy in the world has begun to stabilize. Official data is scheduled to be released on Saturday.
Data on Thursday showed that the US economy maintained a fairly strong pace of growth in the second quarter and activity appears to have accelerated in the current quarter, indicating that strong demand for fuel may continue.
Traders are awaiting the meeting of the Organization of the Petroleum Exporting Countries and its allies, within the framework of the “OPEC Plus” group, next week, to obtain indications about whether Saudi Arabia may want to increase supplies after a jump of about 30 percent in prices during the current quarter. The OPEC Plus Ministerial Committee meeting is scheduled to be held on October 4th.
The National Australia Bank said in a note: “The OPEC Plus meeting next week will be an important indicator for the market with the increasing possibility of reducing voluntary supply cuts.”
Meanwhile, Russian Deputy Prime Minister Alexander Novak said that Russia may impose restrictions on foreign fuel exports, if the fuel export ban imposed last week does not succeed in reducing the constantly high prices of gasoline and diesel.
The government said in a statement late on Thursday that Novak told a meeting of senior managers at Russian oil companies that the ban on gasoline and diesel exports initially led to lower prices on the commodity exchange.
The Kremlin and the Russian Energy Ministry said that the current ban on fuel exports, announced on September 21, will remain in place until the domestic fuel market stabilizes. Analysts expect it to continue until the Russian harvest season ends and fuel demand peaks in a few weeks.
President Vladimir Putin first raised the idea of imposing fuel market regulations similar to those for fertilizers at a government meeting on Wednesday. Moscow imposed temporary quotas on some of its fertilizer exports in late 2021 to ensure adequate domestic supplies, but has continuously extended them since then.
Although Russian domestic fuel prices initially fell on the local commodity exchange after the export ban, they rose after its easing was announced over the weekend.
Novak added: “As a result of the ban on the export of gasoline and diesel fuel, we witnessed a decline in prices on the stock exchange. We expect the decline in these prices to be transmitted to the wholesale and small retail sectors, as well as to agricultural producers,” noting that “price increases are unacceptable.” If the situation does not change, strict regulatory measures will be taken, similar to those in force in the fertilizer market.”
Novak also asked the meeting with oil producers to take urgent measures to reduce fuel prices at gas stations belonging to oil producers and independent companies. He added: “Retail prices should be reduced soon.”
2023-09-30 09:04:56
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