Oil supported by restrictions on exports of Russian products

(London) The price of oil climbed on Friday, driven by the announcement of restrictions on Russian exports of gasoline and diesel, despite the prospect of future increases in American interest rates.


Around 7 a.m. (Eastern time), a barrel of North Sea Brent, for delivery in November, rose 0.74% to $94.06.

Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery the same month, rose 0.96% to $90.60.

In response to its domestic fuel shortage which is causing prices to soar in the country, Russia on Thursday introduced export restrictions on gasoline and diesel.

This decision “immediately pushed prices (crude oil, Editor’s note) into positive territory,” comments Tamas Varga, analyst at PVM Energy.

Especially since Saudi Arabia and Russia plan to deprive the market of 1.3 million barrels per day until the end of the year.

The price increase, however, remains moderated by several factors.

Although the US Federal Reserve (Fed) announced on Wednesday that it would not raise interest rates, the US central bank indicated that it plans to do so later this year.

A possibility that is “destructive to demand” because it penalizes growth, indicates Han Tan, analyst at Exinity.

A context of high rates is also “associated with a feeling of risk aversion”, notes Stephen Innes of SPI AM.

This phenomenon limits the surge in the prices of black gold, an asset considered volatile, and conversely boosts the dollar, a safe haven.

As oil is traded in dollars, its appreciation disadvantages buyers with foreign currencies, who see their purchasing power diminish. Conversely, a weaker dollar traditionally supports demand.


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