Oil Drops Slightly as Russia Bans Fuel Exports

Oil steadied as a broad, risk-off sentiment eroded gains driven by Russia’s ban on gasoline and diesel exports, further tightening an already stressed global fuel market.

The measures, designed to stabilize Russia’s domestic fuel prices, will remove supplies from the worldwide diesel market at a time when refiners are struggling to meet demand. So far this year, Russia has been the world’s single biggest seaborne exporter of the fuel. 

West Texas Intermediate settled below $90 a barrel, after earlier rallying close to $91. In broader markets, investors fled risky assets after the Federal Reserve flagged that borrowing costs would likely stay higher for longer.

Russia’s export ban comes after its shipments of the fuel already were down by a third this month, which had helped push Europe’s diesel benchmark near to $130 a barrel this month. 

Crude has rallied strongly this quarter as Saudi Arabia and Russia extended their production curbs through the end of the year. A brightening outlook in the world’s two biggest economies — the US and China — has also bolstered prices and spurred commentators from Chevron Corp. to Goldman Sachs Group Inc. to float the possibility of oil advancing to $100 a barrel.

Prices:

• WTI for November delivery fell 3 cents to settle at $89.63 a barrel in New York
• Brent for November settlement dropped 23 cents to close at $93.30