Oil rises as China restricts fuel exports and US deploys troops
Oil prices recorded a slight increase due to global supply concerns after China suspended liquid fuel shipments and the US sent additional forces to the Middle East.
Oil prices showed a slight increase on Friday as China halted fuel exports and the US prepared to send new troops and an aircraft carrier to the Middle East. These developments heightened concerns that the global fuel shortage could deepen.
Changes in Oil Prices
Brent crude rose 0.28 percent to $102.60 a barrel, while US crude (WTI) gained 27 cents, or 0.29 percent, to $93.14.
Brent had recorded an increase of over $4 on Thursday, while WTI had risen by over $2. While Brent is heading for a 1.93 percent drop this week following a 14 percent rise in September, WTI gained approximately 4 percent last month.
Assessments of Global Markets
KCM Trade Chief Analyst Tim Waterer stated that the market has been evaluating quite mixed signals this week and that investors are taking a breather following Thursday's sharp movements.
Waterer stated that Saudi Arabia's recovery in oil exports was balanced by news of a new US aircraft carrier heading toward the Gulf and China's decision to restrict refined petroleum product exports.
Middle East and Military Developments
The Wall Street Journal reported that the US is sending a third aircraft carrier and up to 10,000 additional troops to the Middle East.
It was noted that this deployment is taking place at a time when President Donald Trump is considering resuming attacks against Iran following the midterm elections. In a statement at the White House, Trump indicated that they will either sign a very fair agreement or they will no longer exist.
China's Export Restrictions
Reports regarding China's ban on liquid fuel exports heightened concerns in the markets on Thursday. Beijing had eased fuel exports in July after restricting them in March.
China currently manages diesel, gasoline, and jet fuel shipments on a monthly basis. Major refineries entered a one-week holiday without receiving approval for exports in October to regions outside Hong Kong and Macao, and uncertainty remains over whether exports will be permitted again after the holiday.
Inventory and Export Pressures
It was stated that the US administration asked Germany and France to draw down their emergency diesel inventories in order to limit the rise in global fuel prices.
Washington informed these countries that otherwise they could face a potential US diesel export ban.