NEW YORK: Oil prices settled lower after choppy trading on Thursday (Sept 21), rising as much as US$1 a barrel after a Russian ban on fuel exports snatched the focus from Western economic headwinds that had pushed prices down US$1 a barrel early in the session.
Brent futures for November delivery settled down 23 cents to US$93.30 (RM437.48) a barrel, while US West Texas Intermediate crude (WTI) settled down 3 cents to US$89.63 (RM420.27). Both benchmarks had risen and fallen more than US$1 earlier on Thursday.
Russia temporarily banned exports of petrol and diesel to all countries outside a circle of four ex-Soviet states with immediate effect to stabilise the domestic fuel market, the government said on Thursday.
The shortfall, which will force Russia’s fuel buyers to shop elsewhere, caused heating oil futures to rise by nearly 5% on Thursday.
“As diesel and gasoil likely advance to new highs, they will be positioned to provide some upward pull on the crude markets,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
The Fed on Wednesday maintained interest rates, but stiffened its hawkish stance, projecting a quarter-percentage-point increase to 5.50-5.75% by year-end.
That could dampen economic growth and overall fuel demand. The US dollar surged to its highest since early March, making oil and other commodities more expensive for buyers using other currencies.
US unemployment benefit claims dropped to an eight-month low last week, the US Labor Department reported. John Kilduff, partner at Again Capital LLC in New York, called this another factor that would encourage high interest rates.
“The Fed stance and a strong labour market has driven equities and commodities lower, pressuring oil,” he said.
The Bank of England mirrored the Fed and held interest rates on Thursday after a long run of hikes, but said it was not taking a recent fall in inflation for granted.
Norway’s central bank raised its benchmark interest rate on Thursday and, in a surprise move, said it would probably hike again in December.
Oil prices remained supported by concern about tight supply globally entering the fourth quarter. US crude stocks at Cushing, the WTI delivery hub, are at their lowest since July 2022 as the Organization of the Petroleum Exporting Countries and allies maintain production cuts. – Reuters
