Oil extended gains as Iraqi exports via Turkey remain disrupted amid a dispute with Kurdish authorities, while an industry report showed a decline in US stockpiles.
Brent crude traded above $79 a barrel, while West Texas Intermediate topped $74. Both benchmarks rose to their highest level in two weeks.
Oil has been buttressed by factors including supply risks and resurgent demand from China as the nation recovers from pandemic lockdowns. Still, uncertainty continues to weigh on the market, following a banking crisis that has hit institutions in both the US and Europe.
“Supply concerns continue to support oil prices,” said Warren Patterson, the Singapore-based head of commodities strategy at ING Groep NV.
The US is urging Iraq and Turkey to resume exports from the port of Ceyhan after a dispute involving Kurdish authorities halted around 400,000 barrels a day of shipments, tightening the market and helping to boost prices.
One of the biggest oil producers in Iraqi Kurdistan, Norway’s DNO ASA, has started to lower production as the dispute drags on.
Prices
- WTI for May delivery gained 1.2 per cent to $74.06 a barrel by 11:36 a.m. in London.
- Brent for May settlement rose 0.9 per cent to $79.39 a barrel.
Meanwhile, the American Petroleum Institute on Tuesday reported crude inventories dropped by 6.1 million barrels last week, according to people familiar with the data. That would be the biggest drop since November if confirmed by government figures later Wednesday. The previous report showed US stockpiles at the highest level since May 2021.
Still, both oil benchmarks remain on track for a monthly loss amid concerns over a potential US recession and resilient Russian flows. In addition, the OPEC+ alliance is showing no signs of adjusting output when its Joint Ministerial Monitoring Committee meets next week.
© 2023 Bloomberg L.P.
