Oil jumps 4% on reports China halts fuel exports, 10,000 more U.S. troops head to Middle East
Oil prices jumped on Thursday and settled up more than $4 a barrel, after a report said the US was sending more troops and carriers to the Middle East and China suspended oil products exports, stoking fears that global fuel shortages could worsen.
The new front-month December Brent crude futures contract settled at $102.31 a barrel, up 4.37% or $4.28. US West Texas Intermediate crude futures finished at $92.87 a barrel, up 2.71%, or $2.45.
A Wall Street Journal report said the US was sending a third aircraft carrier and up to 10,000 more troops to the Middle East as President Donald Trump weighed resuming strikes on Iran after the US midterm elections.
Trump told reporters at the White House before departing on a campaign trip that he was weighing his options on Iran.
“Now I have to make a decision. They’ll either sign a very fair deal, or they won’t exist any longer,” he said.
The comments, coupled with China’s suspension of fuel exports, contributed to a volatile trading session. Oil prices fell 1% early but reversed course after Reuters reported that Chinese refiners had suspended exports of oil products beyond Hong Kong and Macau until further notice, citing four people familiar with the matter.
“The Chinese export ban suggests concerns about domestic product availability,” UBS analyst Giovanni Staunovo said, adding that it remains to be seen whether the measures will support higher crude imports after recent drawdowns in Chinese crude and fuel stocks.
While crude supplies continue to reach the market, diesel and other refined products remain in short supply following damage to refinery infrastructure in the Gulf and Russia.
Global diesel inventories are already tight after Russia, a top exporter of the fuel, banned exports through October. Industry participants said shortages were unlikely to end before next year. [Continue reading…]