Russia’s relaxation of the fuel ban kept the oil prices steady on Monday, but the demand concerns persisted amid a tighter supply outlook and suspense over high interest rates. Moscow has announced some relaxations to its fuel export ban and lifted restrictions on fuel for bunkering some vessels and diesel with high sulfur content. The restrictions are still in place for all types of gasoline and high-quality diesel, as per a Reuters report.
Brent crude futures increased 0.18% or 17 cents to settle at $93.44 per barrel on Monday. This comes following a 3-cent decrease in the previous Friday’s closing price. US West Texas Intermediate crude witnessed a 7-cent gain (0.08% rise) and was priced at $90.10.
On the Multi Commodity Exchange (MCX), crude oil futures due for an 19 October expiry, were last trading at ₹7,466 per bbl as against the previous close of ₹7,483 per bbl.
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“The market continues to digest Russia’s temporary ban on diesel and gasoline exports into an already tight market, offset with the Fed’s hawkish message that rates will stay higher for longer,” IG Markets analyst Tony Sycamore told news agency Reuters.
Impact of US Fed’s aggressive stance
The prices of crude oil experienced a decline in the previous week, prompted by the Federal Reserve’s adoption of a more aggressive monetary policy stance, which unsettled global financial markets and generated apprehensions regarding the future demand for oil.
The decline put an end to a three-week period of consistent price increases, during which crude oil prices had surged by over 10%, driven by the decisions of Saudi Arabia and Russia to limit oil production by extending production cuts until the year’s end.
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Updated: 25 Sep 2023, 08:01 PM IST