Categories: Crude Oil

Oil Prices Hold Steady Amid Demand Fears and Russia’s Partial Fuel Export Lift

Oil prices managed to find their footing with Brent crude oil edging up 15 cents to $84.22 a barrel and U.S. West Texas Intermediate crude oil gaining 20 cents to $82.51 on Friday.

However, despite the day’s stability, both benchmarks were set to close the week with losses of around 12% and 9%, respectively, as concerns over demand and global economic challenges loomed large.

The week’s pivotal moment came when Russia partially lifted its ban on diesel exports but with a caveat: companies must allocate at least 50% of their diesel production for domestic consumption.

While almost three-quarters of Russia’s 35 million tonnes of diesel exports flowed through pipelines in 2022, the gasoline export ban remains unchanged.

These developments unfolded against a backdrop of apprehension about higher interest rates and their impact on global growth.

The U.S. Federal Reserve’s commitment to maintaining higher rates, coupled with concerns about mounting government spending and a burgeoning budget deficit in the U.S., sent shockwaves through the market.

Edward Moya, an analyst at OANDA, characterized the week as “brutal” due to a relentless bond market selloff, but added that the oil market’s short-term prospects still appeared tight, drawing buyers back into the market.

As investors brace for economic indicators, including the U.S. monthly jobs report, and as the European Central Bank keeps a watchful eye on inflation, the energy sector remains at the intersection of economic forces that could continue to shape oil prices in the weeks to come.

Temitayo Olukoya

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Temitayo Olukoya

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