Brent crosses $102 as China halts fuel exports

Oil prices settled up more than $4 a barrel on Thursday after China suspended oil product exports and reports of a US military buildup in the Middle East stoked fears that global fuel shortages could worsen. December Brent futures closed at $102.31, up 4.37 percent. Diesel and refined products remain the scarcest.

Reuters reported that Chinese refiners suspended exports of oil products beyond Hong Kong and Macau until further notice, citing sources familiar with the matter. China restricted fuel exports in March after the US-Israeli war on Iran, relaxed the curbs in July, and has managed shipments monthly since. It was unclear whether exports would resume after China's weeklong holiday ends October 7.

UBS analyst Giovanni Staunovo said the export halt suggests concern about domestic product availability, though it remains to be seen whether the move will push China to import more crude after recent stock drawdowns. The news drove markets sharply higher after oil had fallen 1 percent early in the session.

Refined products are in short supply following damage to refinery infrastructure in the Gulf and Russia. Russia, a top diesel exporter, has shipped no diesel since July, forcing Brazil and Turkey to compete with Europeans for replacement barrels, and global diesel inventories were already tight.