By Adedapo Adesanya
Oil rose on Friday as another partial lifting of Russia’s fuel export ban compounded demand fears due to macroeconomic headwinds.
On Friday, Brent futures grew by 51 cents to trade at $84.58 per barrel and the US West Texas Intermediate (WTI) crude futures expanded by 48 cents to $82.79 per barrel.
For the week, Brent posted a decline of about 11 per cent and WTI recorded an over 8 per cent drop. This was caused by worries that persistently high interest rates will slow global growth and hammer fuel demand, even if supplies are depressed by Saudi Arabia and Russia, who said they will continue supply cuts to year-end.
Russia announced it had lifted its ban on diesel exports for supplies delivered to ports by pipeline, though the restrictions for petrol exports are still in place.
Diesel is Russia’s biggest oil product export, at about 35 million tonnes last year, of which almost three-quarters were shipped via pipelines. Russia also exported 4.8 million tonnes of petrol in 2022, according to Reuters.
The government, however, said companies still must sell at least 50 per cent of their diesel production to the domestic market.
Support also came as job growth in the US rose by 336,000 in September according to Labor Department statistics.
This is mixed for oil prices as it points to a robust US economy which could buoy sentiment for near-term oil demand.
However, analysts said the statistics resulted in a stronger US Dollar and increased bets on another interest rate hike in 2023.
The US Federal Reserve started raising interest rates in 2022 to cool demand and there are suggestions that monetary policy could remain tight for some time.
A strong US Dollar is typically negative for oil demand, making the commodity relatively more expensive for holders of other currencies. It continued to remain near 11-month highs.
Data from China also lent support as mid-autumn and National Day holiday travel rose 71.3 per cent on the year and 4.1 per cent compared with 2019 to 826 million trips.
In an indication of future US supply, oil rigs fell five to 497 this week, their lowest number since February 2022, according to energy services firm, Baker Hughes.
A ministerial panel of the Organisation of the Petroleum Exporting Countries and allies led by Russia (OPEC+) during the week made no changes to the group’s oil output policy.
Saudi Arabia said it would maintain a voluntary cut of 1 million barrels per day until the end of 2023, while Russia would keep a 300,000 barrels per day voluntary export curb until the end of December.
Dipo Olowookere