Oil prices have continued to climb, reaching the highest level in 10 months after Russia announced a ban on the export of diesel and gasoline. This move has caused prices to increase in Europe.
Price action:
- West Texas Intermediate crude futures for November delivery rose 84 cents, or 0.9%, to $90.46 a barrel on the New York Mercantile Exchange.
- November Brent crude futures increased by 63 cents, or 0.7%, to $92.88 a barrel on ICE Futures Europe.
- October gasoline rose by 0.7% to $2.59 a gallon, while October heating oil gained 0.6% to $3.386 a gallon.
- November natural gas rose by 1.5% to $2.88 per million British thermal units.
Market drivers:
Russia’s temporary ban on exports of gasoline and diesel has led to a rise in global energy prices. The ban aims to ensure sufficient supplies for processing the annual wheat harvest, and it has impacted diesel prices in Europe. This comes after a decrease in shipments earlier this month.
This ban is part of a series of production cuts and supply restrictions implemented since mid-July, which have contributed to the rise in oil prices. In August, rising oil prices also led to an increase in consumer prices in the U.S. As inflation expectations continue to rise, it may complicate the Federal Reserve’s efforts to control inflation and could potentially create problems for global equity markets.
Analysts predict that crude prices in the U.S. and international markets could surpass $100 a barrel, a level not seen since last year. Fawad Razaqzada, market analyst at City Index and FOREX.com, believes that if OPEC+ continues to withhold supply, Brent oil could climb towards $100 as it has already surpassed the $95 level.
