Oil steady on multiple fronts as the market anticipates Iraq exports.
As reported by Reuters: SINGAPORE Oil prices were almost unchanged on Thursday as investors closely followed developments regarding Iraqi Kurdistan oil exports and a surprise decrease in U.S. crude stockpiles partially offset a smaller-than-expected reduction in Russian supplies.
West Texas Intermediate crude increased 12 cents, or 0.2%, to $73.09 a barrel while Brent crude futures decreased 5 cents, or 0.1%, to $78.23 a barrel at 0630 GMT.
Following a stoppage to the northern export pipeline, producers in the semi-autonomous Kurdistan region of northern Iraq have shut in or reduced output at several oilfields, with more outages expected, according to company statements.
However, according to Citi analysts on Thursday, the Kurdistan-Iraq premium in oil prices may disappear sooner than anticipated.
According to Citi, the pipeline flows could increase by about 200,000 barrels per day because „changes in Iraq’s domestic politics may lead to a durable political settlement very soon“ (bpd).
The U.S. Energy Information Administration reports that imports fell to a two-year low while price declines were restrained by an unexpected reduction in U.S. crude oil stockpiles.
In the week ending March 24, crude inventories decreased by 7.5 million barrels to 473.7 million barrels, while analysts‘ predictions in a Reuters poll called for an increase of 100,000 barrels.
But according to Citi analysts, the Kurdistan-Iraq oil price premium may disappear sooner than anticipated.
However, compared to analysts‘ expectations for a 1.6 million-barrel drop, gasoline stocks decreased by 2.9 million barrels to 226.7 million barrels.
National Australia Bank analysts predicted that by the end of Q2, „a seasonal strengthening in demand is expected to drive (oil) prices higher from current levels.“
Even though oil prices slightly declined on Thursday, they still traded within the range that has been in place since the beginning of 2023, the analysts added.
Concerns about the supply were allayed by lower-than-expected reductions in Russian crude production.
According to sources familiar with the data, Russian crude production decreased by about 300,000 bpd in the first three weeks of March, which was less than the 500,000 bpd reductions that were intended.