Oil rises slightly as market weighs mixed supply signals

Oil prices saw a slight increase on Friday after China halted fuel exports, according to Reuters. The Wall Street Journal reported that the United States was sending additional troops and carriers to the Middle East, while also attempting to persuade Europe to reduce emergency diesel reserves. Brent crude was up 29 cents, or 0.28%, to $102.60 per barrel at 0022 GMT, while West Texas Intermediate rose 27 cents, or 0.29%, to $93.14.

Earlier in the week, Brent closed more than $4 higher and WTI increased by over $2 following the WSJ report and China's fuel export news, which raised concerns about potential global fuel shortages. Brent is on track for a 1.93% drop for the week, following a 14% gain in September, while WTI only gained 4% last month. Tim Waterer, KCM Trade chief analyst, stated that the market was reviewing a "distinctly mixed set of signals" after a turbulent Thursday, with traders taking a break.

A more stable export outlook from Saudi Arabia is balanced by reports of another US aircraft carrier heading towards the Gulf and China's decision to limit refined product exports. The US reportedly plans to send three aircraft carriers and up to 10,000 additional troops to the region, with President Donald Trump considering resuming strikes on Iran after the midterm elections.

China's weeklong holiday began on Thursday without granting major refiners permission to export other than to Hong Kong and Macau. It is unclear whether Beijing will re-enable refiner exports after the holiday ends on October 7. The US has instructed Germany and France to reduce emergency diesel inventories to help alleviate rising global fuel prices or face potential US diesel export restrictions, according to three sources familiar with the matter.

The US is also reportedly asking the EU to release 120 million barrels of diesel over the next six months, as EU nations hold nearly 109 million tons of emergency crude and fuel stocks.