Oil prices gained on Monday as investors focused on a tighter supply outlook following Moscow’s temporary suspension on gasoline exports, while staying cautious of more rate hikes, which might depress demand.
Brent crude futures were up 48 cents, or 0.5%, to $93.75 a barrel at 0110 GMT, after closing 3 cents lower on Friday.
West Texas Intermediate oil futures in the United States gained 50 cents, or 0.6%, for the second straight session, trading at $90.53 per barrel.
“Crude oil prices have started the week on the front foot, as the market digests Russia’s temporary ban on diesel and gasoline exports into an already tight market, offset by the Fed’s hawkish message that rates will remain higher for longer,” said IG Markets analyst Tony Sycamore.
Both contracts fell last week as a hawkish Federal Reserve stance rocked global financial sectors and stoked concerns about oil consumption.
Prices had risen by more than 10% in the previous three weeks on expectations of a large crude supply deficit in the fourth quarter, following the extension of additional supply restrictions by Saudi Arabia and Russia until the end of the year.
Last week, Moscow temporarily restricted gasoline and diesel exports to most nations in attempt to stabilize the domestic market, fueling fears of a shortage of products, particularly heating oil, as the northern hemisphere enters winter.
Despite increased prices, the number of operational oil rigs in the United States fell by eight to 507 last week, the lowest since February 2022, according to a weekly data released on Friday by Baker Hughes.
Expectations of improved economic statistics from China, the world’s top petroleum importer, this week further boosted optimism. Analysts have warned that oil prices will find technical resistance at the November 2022 highs, which were reached last week.
According to Goldman Sachs analysts, China’s manufacturing sector is projected to resume expansion in September, with the buying manufacturing index expected to surge over 50 for the first time since March.
China’s oil demand grew 0.3 million barrels per day last week to 16.3 million bpd, primarily due to a steady recovery in jet fuel demand for foreign flights, they noted.
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