The U.S. economy maintained a fairly solid pace of growth in the second quarter and activity appears to have accelerated this quarter, data showed on Thursday.
Oil prices fell in early trade on Friday after a recent rally, as profit-taking and expectations of supply increases by Russia and Saudi Arabia outweighed forecasts of positive demand from China during its Golden Week holiday. Brent November futures which expire on Friday were down 21 cents to $95.17 per barrel. Brent December futures lost 10 cents to trade at $93.00 per barrel at 0055 GMT. U.S. West Texas Intermediate crude (WTI) fell 8 cents to $91.63 per barrel.
Oil prices had eased about 1% on Thursday, as traders took profits after prices soared to 10-month highs, and some worried that high interest rates may weigh on oil demand. “Oil prices recent rally paused overnight,” National Australia Bank said in a note. “Next week’s OPEC meeting (Oct. 4) will be a key update for the market with increasing probability the voluntary supply cuts by Aramco are reduced.”
The market is currently tight with the combined cuts of 1.3 million barrels per day to the end of the year by Saudi Arabia and Russia, part of OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies. Russia recently eased its separate ban on fuel exports introduced to stabilise the domestic market, and analysts do not expect restrictions to stay for long because it may hit refinery runs and impact relations with customers.
Turkey, Brazil, Morocco, Tunisia and Saudi Arabia were among the main destinations for Russian diesel this year, JPMorgan said in a note. “(A) protracted export ban would negatively impact the relationship with the new customers that Russian oil companies have so painstakingly built over the last year and a half,” according to JPMorgan. Russia has not discussed a possible crude oil supply increase to compensate for Moscow’s fuel exports ban with OPEC+, the Kremlin has said. Recent macroeconomic data coupled with China’s week-long Golden Week holiday that began on Friday was supportive for global oil demand.
The U.S. economy maintained a fairly solid pace of growth in the second quarter and activity appears to have accelerated this quarter, data showed on Thursday.
China’s factory activity likely steadied in September, a Reuters poll showed, adding to a run of indicators suggesting the world’s second-largest economy has begun to stabilise. Official data is due on Saturday. “(An) increase in international travel during the Golden Week holiday is boosting Chinese oil demand,” ANZ Research said in a note.
Source:financialexpress.com