Oil posted its biggest quarterly rally since the initial jolt of the war in Ukraine, as low Russian fuel exports threaten to further tighten a market struggling with OPEC+ production cuts.
Industry data released on Friday showed Moscow plans to export almost no diesel next month in a bid to lower domestic prices. The move pushed European diesel futures back above the psychologically key $1,000 a tonne level.
Benchmark US crude futures consolidated their biggest quarterly gain since the period ended in March 2022 on OPEC+ supply cuts led by Saudi Arabia and very low inventories at the Cushing center in the USA On Friday, West Texas Intermediate reversed earlier gains and fell to below $91, largely following the path of US stocks.
Many of the most significant moves in the oil market this week have come out of general prices. Key times have risen amid fears over the availability of US supplies. Meanwhile, the premium for gasoline over crude oil in the US has fallen in a possible sign that higher crude prices are starting to affect margins.
Even with traders cautiously eyeing the demand outlook, there is little left to obstruct crude’s march towards $100 a barrel as OPEC forecasts a supply shortfall of 3 million barrels a day next quarter
“Oil for short-term delivery is trading at a significant premium, which is an indication of tight supply,” Commerzbank AG analyst Barbara Lambrecht said in a report. “At the same time, the demand for oil continues to grow. This is tightening the oil market, as evidenced by declining inventories.”
China’s Golden Week holiday, which runs until next Friday, is expected to boost consumption as more people fly domestically and on international routes.
Prices:
- November WTI fell 92 cents to settle at $90.79 a barrel in New York
- Front-month futures rose 29% this quarter.
- Brent for November, which expires on Friday, fell 7 cents to settle at $95.31 a barrel.
- The most active December contract was set at $92.20
