Oil prices held stable on Friday but fell across the week on profit-taking and supply fears from Russia’s gasoline export embargo versus demand worries from potential rate hikes.
Brent fell 3 cents to $93.27. It lost 0.3% in the week after three weeks of rises.
As U.S. oil rig counts declined, WTI futures jumped 40 cents, or 0.5%, to $90.03 a barrel. The benchmark declined 0.03% last week, the first drop in four weeks.
“Investors are anticipating a slack in demand coming into October as refineries go into maintenance and a higher interest rate will further pressure markets,” said Dennis Kissler, senior vice president of trading at BOK Financial. Profit-taking also occurred.
Concerns about tight supply have pushed prices up over 10% in three weeks.
After holding the benchmark federal funds rate constant this week, U.S. Federal Reserve officials cautioned of more rate hikes.
“Inflation is still too high, and I expect the (Federal Open Market) Committee to raise rates further and hold them at a restrictive level for some time,” Fed Governor Michelle Bowman said.
She monitored energy price increases as a risk.
Higher interest rates raise borrowing costs, slowing economic growth and oil demand.
The temporary restriction on Russian gasoline and diesel exports to most nations was expected to reduce supplies.
State media agency Tass reported that Transneft halted Friday’s diesel delivery to Primorsk and Novorossiysk.
The restriction will “bring new uncertainty into an already tight global refined product supply picture and the prospect that the impacted countries will be seeking to bid up cargoes from alternative suppliers,” RBC noted.
Russian wholesale gasoline fell over 10% and diesel 7.5% on Friday on the St. Petersburg International Mercantile Exchange.
Baker Hughes reported that U.S. oil rig numbers declined eight to 507 this week, their lowest since February 2022.
After intense summer driving, U.S. refineries perform autumn maintenance to meet fuel demand. IIR Energy predicted 1.4 million barrels per day (bpd) offline refinery capacity this week, up from 800,000 last week.
The CFTC said that money managers increased their net long U.S. crude futures and options positions in the week to Sept. 19.
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