Oil prices recorded a weekly loss last week on profit-taking and macroeconomic concerns but rose by about 22 per cent during the third quarter on tight supplies.
Brent, the benchmark for two thirds of the world’s oil, settled 0.97 per cent lower at $92.20 a barrel on Friday. West Texas Intermediate, the gauge that tracks US crude, closed down 1 per cent at $90.79 a barrel.
“After an amazing week, month and quarter, oil was ready for some profit-taking," said Edward Moya, senior market analyst at Oanda.
"Energy traders quickly realised this wasn't the time for oil to rally above the $100 a barrel level, so they are cautiously locking in some profits.
“Oil isn't going to have a major pullback given how tight the market will remain following the Russian fuel curbs and on expectation China's golden week travel will boost jet fuel demand."
Crude futures have been rising on Opec+ production cuts, as well as additional supply reductions by group members Saudi Arabia and Russia.
However, signs of growing US crude supply weighed on futures on Friday.
American oil production grew 0.7 per cent to 12.99 million barrels per day in July, its highest since November 2019, the US Energy Information Administration said.
Meanwhile, US crude and petroleum products supplied fell by 592,000 bpd in July to 20.12 million bpd, the lowest since April.
US crude inventories, an indicator of demand, fell by 2.2 million barrels in the week that ended on September 22, EIA data showed.
Last month, Russia announced a temporary ban on petrol and diesel exports in response to domestic shortages, adding to the tightness in the market.
The International Energy Agency expects a “substantial” crude market deficit in the fourth quarter of this year due to Opec+ output cuts.
The agency expects global oil demand to rise by 1.5 million bpd in the second half of this year, compared with the first half, exceeding supply by 1.24 million bpd during that period.
Opec, which expects a supply shortfall of 3.3 million bpd in the fourth quarter, has said China’s recent stimulus measures would help to revive growth in the world’s second-largest economy.
The Opec+ ministerial panel meeting will take place on October 4, where Saudi Arabia and Russia, with collective supply cuts of 1.3 million bpd, “may reassess whether the full package of restrictions is still necessary”, said Craig Erlam, senior market analyst at Oanda.
“With investors now questioning the resilience of the global economy going into next year against the backdrop of higher interest rates for longer, that bullish bias in oil markets may become more balanced."2023-10-01T07:42:31Z dg43tfdfdgfd