By Helen Clark
PERTH, Oct 2 (Reuters) – Oil prices drifted slightly higher on Friday after China halted fuel exports, while the Wall Street Journal reported that the US is sending more troops and carriers to the Middle East as it also tries to make Europe draw down more emergency diesel.
Brent was up 29 cents, or 0.28%, to $102.60 per barrel at 0022 GMT. West Texas Intermediate rose 27 cents, or 0.29%, to $93.14.
On Thursday, Brent closed more than $4 higher and WTI was up over $2 following the WSJ report and the China export news, stoking fears that global fuel shortages could worsen.
Brent is on track for a 1.93% loss for the week after a 14% overall gain in September, while WTI gained just 4% last month.
“The market is taking stock of a distinctly mixed set of signals this week,” said KCM Trade chief analyst Tim Waterer, who noted after a disruptive Thursday, traders were “simply taking a breather.”
“A healthier-looking Saudi export picture is being offset by reports of another US aircraft carrier heading toward the Gulf and by China’s decision to curb refined product exports.”
The WSJ 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.
“Now I have to make a decision. They’ll either sign a very fair deal, or they won’t exist any longer,” Trump told reporters at the White House.
Reports that China had imposed a liquid fuel export ban also drove market worries on Thursday.
Beijing restricted fuel exports in March after the outbreak of the US-Israeli war on Iran, then relaxed the curbs in July and is managing diesel, gasoline and jet fuel shipments on a monthly basis.
China started a weeklong holiday on Thursday without giving major refiners a green light to export to regions other than Hong Kong and Macau in October, the sources said.
It was not clear whether Beijing would resume permitting refiners’ exports after the holiday ends on October 7.
The Trump administration has told Germany and France to draw down emergency diesel inventories to help ease soaring global fuel prices or face a potential US diesel export ban, according to three people close to the discussions.
“US pressure on EU nations to release oil is also adding to that check on prices,” said Mukesh Sahdev, chief oil analyst of XAnalysts.
A source told Reuters that the US has asked the EU to release 120 million barrels of diesel over the next six months.
EU countries hold nearly 109 million tons of emergency crude and fuel stocks.
(Reporting by Helen Clark; Editing by Thomas Derpinghaus)
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