25 September 2023
Oil prices rose on Monday as investors focused on the prospects of tightening supply after Moscow imposed a temporary ban on fuel exports, but at the same time are wary of further rate hikes that could dampen demand.
Brent crude futures rose 69 cents, or 0.7%, to $93.96 a barrel by 06:46 GMT after falling 3 cents on Friday. West Texas Intermediate continued to rise for a second session and traded at $90.57 a barrel, up 54 cents, or 0.6%.
Both contracts went on a tear last week, breaking a three-week winning streak, after the Federal Reserve's hawkish stance caused concern in the global financial sector and boosted demand for oil.
Prices had risen more than 10% in the previous three weeks amid forecasts of a large oil supply deficit in the fourth quarter after Saudi Arabia and Russia extended additional supply cuts until the end of the year.
Moscow last week temporarily banned petrol and diesel exports to most countries to stabilise the domestic market, adding to fears of low supply of the commodity, especially heating oil, as the Northern Hemisphere enters winter.
In the US, despite higher prices, the number of active oil rigs fell by eight last week to 507, the lowest since February 2022, Baker Hughes showed in its weekly report on Friday.
Expectations of better economic data this week from China, the world's biggest oil importer, also helped boost sentiment. However, analysts said oil prices face technical resistance at the November 2022 highs reached last week.
According to analysts at Goldman Sachs, China's manufacturing sector is expected to return to growth in September, with the manufacturing business activity index expected to exceed the 50 mark for the first time since March.
On the positive side, Chinese oil demand rose 0.3 million bpd to 16.3 million last week, partly due to a gradual recovery in demand for jet fuel for international flights, they added.
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