Key Moments
- Brent crude traded at $102.60 per barrel and WTI at $93.14, both posting modest gains in early trade.
- China’s halt of liquid fuel exports and reports of additional U.S. military deployments to the Middle East fueled supply concerns.
- Brent was heading for a 1.93% weekly loss after a 14% rise in September, while WTI gained 4% over the same month.
Early Trade: Modest Price Gains
Oil prices moved slightly higher on Friday in early Asian hours as the market reacted to China suspending fuel exports and to media reports of increased U.S. military presence in the Middle East, alongside U.S. efforts to push Europe to tap emergency diesel reserves.
| Contract | Price | Move | Percentage Change | Time |
|---|---|---|---|---|
| Brent | $102.60 per barrel | +$0.29 | +0.28% | 0022 GMT |
| West Texas Intermediate (WTI) | $93.14 | +$0.27 | +0.29% | 0022 GMT |
The moves followed a much stronger session on Thursday, when Brent settled more than $4 higher and West Texas Intermediate closed over $2 higher after the Wall Street Journal report and news about China’s fuel export restrictions, intensifying fears of tightening global product supplies.
Weekly and Monthly Performance
Despite the latest uptick, Brent was set for a 1.93% decline for the week, following a 14% overall rise in September. West Texas Intermediate logged a 4% gain over the same month.
“The market is taking stock of a distinctly mixed set of signals this week,” said KCM Trade chief analyst Tim Waterer, who noted after a disruptive Thursday, traders were “simply taking a breather.”
He added: “A healthier-looking Saudi export picture is being offset by reports of another US aircraft carrier heading toward the Gulf and by China’s decision to curb refined product exports.”
Geopolitics: U.S. Military Posture and Iran
The Wall Street Journal reported that the United States was deploying a third aircraft carrier and up to 10,000 additional troops to the Middle East, as President Donald Trump considered resuming strikes on Iran after the U.S. midterm elections.
“Now I have to make a decision. They’ll either sign a very fair deal, or they won’t exist any longer,” Trump told reporters at the White House.
China’s Fuel Export Curbs
Market anxiety on Thursday was also driven by reports that China had imposed a ban on liquid fuel exports.
Beijing restricted fuel exports in March after the outbreak of the US-Israeli war on Iran, later easing those limits in July. Since then, diesel, gasoline and jet fuel shipments have been managed on a monthly basis.
According to sources, China began a weeklong holiday on Thursday without granting major refiners authorization to export to destinations other than Hong Kong and Macau in October. It remained uncertain whether refiners would be allowed to resume exports after the holiday concludes on October 7.
U.S. Pressure on European Diesel Stocks
The Trump administration has urged Germany and France to draw down emergency diesel inventories in an effort to cool surging global fuel prices, warning of a possible U.S. diesel export ban if they do not comply, according to three people familiar with the discussions.
“US pressure on EU nations to release oil is also adding to that check on prices,” said Mukesh Sahdev, chief oil analyst of XAnalysts.
A source told Reuters that Washington has requested the European Union to release 120 million barrels of diesel over the next six months. EU countries collectively hold nearly 109 million tons of emergency crude and fuel reserves.
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