Oil edges up amid demand concerns

London — 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 15c, or 0.18%, at $84.22 at 8.17am GMT, while US West Texas Intermediate (WTI) crude futures were up 20c, 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 petrol exports remains in place.

Brent and WTI futures were on course for about 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 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 US Treasury prices to 17-year lows, on concerns the US Federal Reserve will keep rates higher for longer and growing worries about government spending and a ballooning budget deficit in the US, the world’s top oil consumer.

“Oil prices are stabilising after a brutal week that saw a relentless bond market sell-off 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 US 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.

Reuters