HOUSTON (Reuters) – Oil prices steadied on Friday but ended the week lower on profit-taking and with markets balancing supply concerns stemming from Russia’s ban on fuel exports and demand concerns from future interest rate hikes.
The settlement price for Brent crude futures was set at a drop of three cents to $93.27 per barrel. The index fell 0.3% during the week, breaking a three-week series of gains.
US West Texas Intermediate crude futures rose 40 cents, or 0.5%, to $90.03 per barrel, with the number of US oil rigs declining. The index fell 0.03% this week, the first decline in four weeks.
“Investors expect a decline in demand in October as refineries go into maintenance and higher interest rates will put further pressure on markets,” said Dennis Kessler, senior vice president of trading at BOK Financial, adding that there were also some gains. Taking.
Contracts have risen more than 10% in the past three weeks on concerns about tight supply.
US Federal Reserve officials have warned against further rate hikes, even after voting to keep the benchmark federal funds rate steady at this week’s meeting.
“Inflation is still very high, and I expect that it will probably be appropriate for the (Federal Open Market) Committee to raise interest rates further and keep them at a restricted level for some time,” Fed Governor Michelle Bowman said.
She noted that the potential further rise in energy prices was a particular risk she was monitoring.
Higher interest rates increase borrowing costs, which can slow economic growth and reduce demand for oil.
Meanwhile, Russia’s temporary ban on gasoline and diesel exports to most countries is expected to tighten supplies.
Russia’s Transneft suspended diesel deliveries to its main Baltic and Black Sea terminals, Primorsk and Novorossiysk, on Friday, state news agency TASS said.
The ban “will bring new uncertainty to an already tight global refined products supply picture and the possibility that affected countries will seek to bid for shipments from alternative suppliers,” RBC said in a note.
Wholesale gasoline prices in Russia fell by almost 10% and diesel by 7.5% on Friday on the St. Petersburg International Trade Exchange.
The number of oil rigs in the United States, an indicator of future production, also fell by eight to 507 this week, the lowest level since February 2022, energy services company Baker Hughes said.
Refineries in the United States routinely perform maintenance in the fall after heavy operations to meet fuel demand in the summer driving season. The capacity of non-operating refineries was expected to reach 1.4 million barrels per day this week, according to IIR Energy, compared to 800,000 barrels per day last week.
The U.S. Commodity Futures Trading Commission said money managers raised their net U.S. crude futures and options positions in the week ending September 19.
(Reporting by Arathi Somasekhar in Houston and Nicole Zhao in New York; Preparing by Mohammed for the Arabic Bulletin) Robert Harvey, Yuka Obayashi in Tokyo and Emily Chow in Singapore; Edited by Margarita Choi, David Gregorio, and Josie Kao
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