WTI retreats as Russia lifts fuel ban

Russia is making news headlines concerning the oil sector on Monday. WTI crude oil has lost more than 0.45% of its value after reaching a high of $90.34. WTI’s three-week surge was ended by the Federal Reserve’s decision to hold rates while predicting higher rates for the upcoming year. Oil prices were cushioned by a decline in the number of oil rigs in the US and an acceleration of China’s economic recovery.

The Federal Reserve has sent Treasury yields skyrocketing, underpinning the Greenback to a year-to-date high of 106.09, as drafted by the US Dollar Index (DXY). Nevertheless, WTI’s fall was cushioned by the oil rig’s count falling last week to 507 from 515, despite higher oil prices.

On Monday, WTI lost more than 0.50% of its value in a reaction to changes made on Russia’s fuel embargo. At the same time, increasing interest rates in the United States strengthened the US dollar, this development, accordingly, has hurt assets denominated in US dollars. Late in the North American trading session, WTI is trading at $89.45 per barrel.

With Russia’s fuel ban being relaxed and the strong currency, West Texas Intermediate appears to have fallen. Investor sentiment is still negative amid rumours that the US central bank would raise interest rates once more in 2023. Russia’s acceptance of modifications to its fuel export ban, according to several Wall Street institutions and major banks, was a hindrance to oil prices, which were expected to reach $100 per barrel.

The three-week oil rally that saw WTI gain more than 10% as Saudi Arabia and Russia extended their crude oil supply cutbacks towards December 2023 was stopped by last week’s Fed decision to keep rates but upwardly adjust the dot-plots for the coming year, foreseeing rates over 5%.


In the meantime, speculations of better economic data from China keep oil traders’ spirits higher, following last week’s data. China is the world’s largest oil importer, and if economic activity slows down, it could weigh on global oil prices.

US crude oil price finds support at the daily low of $88.15 from September 21. However, before attempting to challenge the year-to-date (YTD) high at $92.26 WTI must first clear last Friday’s high at $90.93.