Oil Prices Rise, But Post Biggest Weekly Decline Since March

Date: 07 October 2023 - 22:31

News ID: ۱۲۰۰۳۱

NEW YORK (Reuters) - Oil prices rose but remained posted their steepest weekly losses since March, after another partial lifting of Russia’s fuel export ban compounded demand fears due to macroeconomic headwinds.
Brent futures settled up 51 cents at $84.58 per barrel. U.S. West Texas Intermediate crude futures settled up 48 cents at $82.79.
For the week, Brent posted a decline of about 11% and WTI recorded an over 8% drop, on 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.
U.S. job growth rose by 336,000 in September according to Labor Department statistics, far exceeding economists’ forecasts of a 170,000 rise.
The sentiment of the statistics is mixed for oil prices. A robust U.S. economy could buoy sentiment for near-term oil demand, analysts said, but conversely the statistics resulted in a stronger U.S. dollar and increased bets on another interest rate hike in 2023.
A strong U.S. dollar is typically negative for oil demand, making the commodity relatively more expensive for holders of other currencies.
“Today’s (jobs) number keeps alive the prospect of another rate hike and certainly backs the Federal Reserve’s argument on the need for interest rates to stay higher for longer,” ING analysts said in a note.
Russia announced it had lifted its ban on diesel exports for supplies delivered to ports by pipeline. Companies still must sell at least 50% of their diesel production to the domestic market.
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The price spread between gasoil and Brent futures fell to the lowest since July at $23.59 a barrel on the news, but have since rebounded to $25.84.
“Fear for the health of the global economy and thus oil demand going forward is at the heart of the sell-off,” SEB analyst Bjarne Schieldrop said.
But reports of firmer Chinese travel activity has for now provided a floor to prices. The country’s mid-autumn and National Day holiday travel rose 71.3% on the year and 4.1% compared with 2019 to 826 million trips, according to news agency Xinhua.
In an indication of future U.S. supply, U.S. oil rigs fell five to 497 this week, their lowest number since February 2022, energy services firm Baker Hughes (BKR.O) said on Friday.
Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 3 by 5,877 contracts to 279,759, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.