Oil is back in focus due to supply shortage

Pumpjacks are visible against the setting sun at the Daqing oil field in Heilongjiang

Pumpjacks are seen before the setting sun at the Daqing oil field in China’s Heilongjiang province on December 7, 2018. Reuters/Stringer acquires licensing rights

SINGAPORE, Sept 25 (Reuters) – Oil prices rose on Monday as investors focused on a tight supply outlook after Moscow issued a temporary ban on fuel exports, while remaining cautious about further rate hikes that could lead to There may be a decrease in demand.

Brent crude futures were up 48 cents, or 0.5%, at $93.75 a barrel by 0110 GMT, after falling 3 cents on Friday.

U.S. West Texas Intermediate crude futures traded up 50 cents, or 0.6%, at $90.53 a barrel, gaining for the second consecutive session.

“Crude oil prices have started the week on the front foot, as the market digests Russia’s temporary ban on diesel and gasoline exports, adding to an already tight market, along with the Fed’s hawkish message that rates will remain low for a long time,” IG said. Will remain high for some time.” said market analyst Tony Sycamore.

Both contracts snapped a three-week winning streak and came after the Federal Reserve’s dovish stance last week sent global financial sectors reeling and fueled oil demand concerns.

Prices had risen more than 10% in the past three weeks on forecasts for a wider crude supply deficit in the fourth quarter after Saudi Arabia and Russia extended additional supply cuts through the end of the year.

Last week, Moscow temporarily banned gasoline and diesel exports to most countries to stabilize the domestic market, amid concerns of reduced supply of the products, especially for heating oil, with the onset of winter in the Northern Hemisphere. had increased.

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

Sentiment also improved on expectations of better economic data this week from China, the world’s largest crude oil importer. However, analysts said oil prices face technical resistance at the November 2022 high, reached last week.

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

In a positive sign, China’s oil demand rose 0.3 million barrels per day last week to 16.3 million bpd, he said, partly due to a gradual improvement in demand for jet fuel for international flights.

Reporting by Florence Tan; Editing by Sonali Paul

Our Standards: The Thomson Reuters Trust Principles.

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