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

On Friday, Brent futures were down 11 cents, or 0.13%, at $83.96 at 1203 GMT, while U.S. West Texas Intermediate crude futures were down 13 cents, or 0.16%, at $82.18.

Russia announced on Friday 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 price spread between gasoil and Brent futures fell to the lowest since July at $23.59 a barrel on the news, but have since rebounded to $26.84 at 1203 GMT.

Oil prices fall again; demand worries outweigh tight supply

Brent and WTI futures were on course for almost 12% and 10% week-on-week declines respectively on Friday, as concerns that higher-for-longer interest rates will slow global growth and hammer fuel demand offset announcements by Saudi Arabia and Russia confirming voluntary supply cuts to the end of the year.

“Fear for the health of the global economy and thus oil demand going forward is at the heart of the sell-off,” SEB analyst Bjarne Schieldrop said.

Investors will be looking ahead to the U.S. monthly jobs report at 1230 GMT on Friday, hoping that the data show a moderation in job growth to reassure the Fed against further rate hikes.

“There will be enormous focus on jobs data for signs of cracks appearing that can offer the central bank the comfort it craves,” OANDA analyst Craig Erlam said.

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.

The German economy is expected to contract by 0.4% in 2023 because of high inflation and energy prices, government sources told Reuters.

But reports of firmer Chinese travel activity could provide a floor to prices. The country’s mid-autumn and National Day holiday travel rose 71.3% on the year and 4.1% compared with 2019 to 826 million trips, according to news agency Xinhua.


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