Key facts
- China told energy companies to suspend new fuel export contracts and try to cancel already arranged fuel shipments abroad.
- Brent crude futures rose $3 to $98.15 a barrel, a 2% increase.
- US West Texas Intermediate crude was at $90.35 a barrel.
- Diplomatic efforts to end the US-Israeli war on Iran have had little effect.
- Saudi Arabia resumed oil tanker loadings from its Red Sea port of Yanbu.
- OPEC+ countries are likely to keep their oil production targets steady for November.
Oil prices climbed on Thursday as China suspended new fuel export contracts, a move that could tighten global fuel markets already facing supply shortages. Investors are also monitoring diplomatic efforts related to the US-Iran situation and recovering Gulf exports.
Brent crude futures rose about 2% as China told energy companies to suspend new fuel export contracts and try to cancel already arranged fuel shipments abroad, according to Reuters, citing unnamed trading and energy industry sources. The suspension, which excludes jet fuel and bunkering fuel contracts, suggests concern over domestic fuel availability despite ample stored volumes.
Brent crude futures were up 0.1% at $98.15 a barrel, while US West Texas Intermediate crude was at $90.35 a barrel, down 0.1%. Both benchmarks had risen on Wednesday. Brent recorded a monthly gain of around 14% in September, its biggest since July, while WTI increased by about 5% on the month.
"Although buying continued amid supply concerns as peace talks stalled, selling pressure also prevailed as Middle Eastern oil exports showed signs of recovery," said Toshitaka Tazawa, an analyst at Fujitomi Securities, citing Saudi Arabia's resumption of exports from its Red Sea port of Yanbu as a key factor. He added that a new catalyst would be needed for WTI to break below the immediate support level of $88 a barrel.
Qatar expressed hope for a breakthrough in US-Iran shuttle diplomacy, but US President Donald Trump denied reports that he was willing to offer Iran sanctions relief in exchange for steps on its nuclear program.
Saudi Arabia resumed oil tanker loadings from its Red Sea port of Yanbu after restarting operations on its East-West Pipeline. Goldman Sachs estimates Gulf oil exports have recovered to 23.3 million barrels per day over the last week, doubling in September.
OPEC+ countries are likely to keep their oil production targets steady for November when they meet on Sunday, two people with knowledge of the matter told Reuters. Meanwhile, US crude inventories rose by 922,000 barrels in the week ended September 25, according to the EIA, while fuel inventories fell sharply on strong seasonal and global demand.