By Ken Afor
Friday saw a rise in oil prices following concerns as US sanctions on Russian crude exports raise concerns about supply in a competitive market.
Global inventories are expected to fall through the fourth quarter.
Brent futures increased by 50 cents, or 0.6%, to $86.50 per barrel, and U. S. At 0345 GMT, West Texas Intermediate (WTI) crude rose 64 cents, or 0.8 percent, to $83.55 per barrel.
Both contracts surged on Monday on the possibility of disruptions to Middle Eastern exports after Hamas’ attack on Israel over the weekend threatened a wider conflict.
Brent is expected to increase by 2.3 percent for the week, while WTI is expected to rise by 0.9 percent.
In the course of the week, prices partially reversed their gains.
However, on Thursday, the U. S. imposed the first sanctions on owners of tankers transporting Russian oil priced higher than the G7 price cap of $60 per barrel, to close gaps in the system intended to punish Moscow for its invasion of Ukraine.
The second-largest oil producer and major exporter in the world is Russia, and the more restrictive US supply could be limited if its shipments are scrutinized.
Also on Thursday, the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for growth in global oil demand, citing indications of a resilient global economy thus far this year and anticipated future increases in demand in China, the biggest oil importer in the world.
“Supply side issues remained the focus in the crude oil market,” Daniel Hynes, senior commodity strategist at ANZ, said in a note on Friday, adding that prices during early trade on Friday rose on the stronger U.S. sanctions enforcement.
“Sentiment was also boosted after OPEC said it expects crude stockpiles to slump by 3 (million barrels per day) this quarter. That assumes that there are no further supply disruptions emanating from the Israel-Hamas war,” Hynes said.
Data released on Friday that showed a month-over-month decline in Chinese crude imports was ignored by oil prices.
The number of imports last month was 45.74 million metric tons, or 11.13 million barrels per day, which is a 10.5% decrease from the third-highest level ever recorded in August.
The trend seen through 2023, in which imports have significantly surpassed 2022 levels when China’s economy was severely hampered by widespread pandemic restrictions, was continued in September, when imports were up 14% from a year earlier.
