Oil prices have rebounded from $1 down to $1 up in trading on Thursday, after a Russian ban on fuel exports snapped focus away from Western economic headwinds and back to throttled crude supply to the end of 2023.
Energy Africa reports that by 13:48 GMT, Brent futures for November delivery had risen by $1.02, or 1.09%, reaching $94.55 per barrel. U.S. West Texas Intermediate crude (WTI) also saw an increase of $1.27, or 1.42%, reaching $90.93, following an earlier drop to their lowest level since September 14.
Both benchmark prices had experienced declines of over $1 earlier in the same Thursday session.
Russia implemented a temporary ban on gasoline and diesel exports to all countries except for four ex-Soviet states, effective immediately. This decision aimed to stabilize the domestic fuel market, as announced by the government on Thursday.
As a result of this shortfall, Russian fuel buyers will need to seek alternative sources, prompting refineries to process more of the diminishing crude oil supply to meet this increased demand, according to Tamas Varga, an oil broker at PVM.
“The Russian news came out, and the focus immediately shifted back to supply concerns,” noted Vargas, alluding to the U.S. Federal Reserve’s hawkish signals.
Earlier price declines were offset by ongoing concerns about tight global supply as the fourth quarter approached. Crude stocks at Cushing, the WTI delivery hub, were at their lowest level since July 2022, and production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies continued to impact the market.