Oil prices hold steady, Russia rolls back diesel export ban

Oil prices were stable on Friday but were on course for a week-on-week loss, as demand fears driven by macroeconomic headwinds were compounded by another partial lifting of Russia’s fuel export ban on Friday.

On Friday, Brent futures were up 15 cents, or 0.18%, at $84.22 at 0817 GMT, while U.S. West Texas Intermediate crude futures were up 20 cents, or 0.24%, at $82.51.

Russia announced that it had lifted its ban on diesel exports for supplies delivered to ports by pipeline, under the proviso that companies sell at least 50% of their diesel production to the domestic market.

Almost three quarters of Russia’s 35 million tonnes of diesel exports were delivered via pipeline in 2022.

The ban on all gasoline exports remains in place.

Brent and WTI futures were on course for approximately 12% and 9% week-on-week declines respectively on Friday, driven principally by concerns that higher-for-longer interest rates will slow global growth and hammer fuel demand.

Demand concerns offset announcements by Saudi Arabia and Russia this week confirming that current voluntary supply cuts worth 1.3 million barrels per day (bpd) will be held until the end of the year.

This week saw a steep drop in U.S. Treasury prices to 17-year lows, on concerns the U.S. Federal Reserve will keep rates higher for longer and growing worries about government spending and a ballooning budget deficit in the United States, the world’s top oil consumer.

“Oil prices are stabilizing after a brutal week that saw a relentless bond market selloff trigger global growth worries,” said Edward Moya, an analyst at OANDA.

“The worst week for crude since March is starting to attract buyers given the oil market will still remain tight over the short-term,” Moya said.

Investors will be looking ahead to the U.S. monthly jobs report on Friday for signs of how strong the economy is.

The European Central Bank (ECB) has not ruled out further interest rate hikes if inflation were to keep rising, ECB board member Isabel Schnabel said in an interview with Croatian paper Jutarnji list.