Oil futures were edging lower on Monday after Russia announced some relaxations to its fuel export ban, while investors continue to weigh a tightening supply picture and an uncertain demand outlook after the Federal Reserve last week signaled interest rates would remain higher for longer than market participants had anticipated.
Price action
-
West Texas Intermediate crude
CL00,
-0.29%
for November delivery
CL.1,
-0.29% CLX23,
-0.29%
dropped 61 cents, or 0.7%, at $89.42 a barrel on the New York Mercantile Exchange. -
November Brent crude
BRN00,
-0.11% BRNX23,
+0.03% ,
the global benchmark, was down 38 cents, or 0.4%, at $92.90 a barrel on ICE Europe. -
October gasoline
RBV23,
-0.66%
fell 0.8% to $2.49 a gallon, while October heating oil
HOV23,
-1.45%
was off nearly 1% to $3.20 a gallon. -
October natural gas
NGV23,
-0.46%
rose 1.6% to $2.93 per million British thermal units.
Market drivers
U.S. energy prices were trading modestly lower on Monday after Russia lifted restrictions on fuel used as bunkering for some vessels, and on diesel with high sulfur content, just days after Moscow said it was temporarily banning exports of gasoline and high-quality diesel.
Last Thursday, Russia surprised oil markets by announcing a temporary ban on exports of all types of gasoline and high-quality diesel to all countries outside a circle of four ex-Soviet states with immediate effect, to stabilize fuel prices on the domestic market.
The ban on gasoline and high-quality diesel remains in place after Russia’s decision to tweak fuel export restriction on Monday, according to a government document cited by Reuters.
Oil futures have rallied since summer, with both WTI and Brent topping the $90-a-barrel threshold after Saudi Arabia in July cut production by 1 million barrels a day, recently moving to extend the cut through year-end. Russia had also moved to extend a curb on crude exports through year-end.
Remarks by Fed Chair Jerome Powell after last week’s policy meeting, which saw rates left unchanged, dampened hopes for a quick end to tight policy even if rates have peaked, said Raffi Boyadjian, lead market analyst at XM, in a note.
September policy decisions by the Fed, European Central Bank and Bank of England have likely cleared the way for a continued pause in further rate hikes, but there’s been no relief rally for assets because “the overriding message from all three central banks has been that high rates are here to stay,” he wrote.
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