Crude oil prices rose by about 2%, at the end of today’s trading, Thursday, March 30, 2023, to record the highest level in more than two weeks.
This comes as investors closely await developments in Iraqi Kurdistan’s oil exports, at a time when a sudden drop in US oil inventories compensated for a less-than-expected drop in Russian supplies.
Crude oil prices today
At the end of the session, benchmark Brent crude futures – for May 2023 delivery – rose 1.3%, recording $79.27 a barrel.
West Texas Intermediate crude futures – for May 2023 delivery – also increased by 1.9%, recording $ 74.37 a barrel, the highest level since March 13, 2023, according to what was seen by the specialized energy platform.
And crude oil prices ended their trading, yesterday, Wednesday, March 29, in decline, to fall for the first time in 3 consecutive sessions, with the release of the US inventory report.
Iraqi Kurdistan oil
Data showed that producers have closed or reduced production at several oil fields in the semi-autonomous Kurdistan region of northern Iraq after the export pipeline to Turkey stopped, with more outages on the horizon.
Citi analysts said that the premium for crude oil prices between Kurdistan and Iraq may fade sooner than expected.
Citi analysts noted that “changes in Iraq’s internal politics may lead to a permanent political settlement very soon,” estimating that pipeline flows could grow by about 200,000 barrels per day.
US oil stocks
At the same time, an unexpected drop in US crude oil inventories supported prices, with imports falling to a two-year low, according to the US Energy Information Administration.
Crude oil inventories fell by 7.5 million barrels to 473.7 million barrels in the week ending March 24, while analysts’ expectations in a Reuters poll indicated an increase of 100 thousand barrels.
However, gasoline inventories fell by 2.9 million barrels to 226.7 million barrels, compared to analysts’ expectations for a decline of 1.6 million barrels.
Oil price analysis
Analysts from the National Australia Bank said: “The seasonal rise in demand by the end of the second quarter is expected to lead to a rise in crude oil prices from current levels.”
Analysts added that while crude oil prices started Thursday’s trading with a slight decline; it remained within the trading range seen since the beginning of 2023.
Meanwhile, lower-than-target cuts in Russian crude production eased supply concerns.
Sources familiar with the data told Reuters that Russian crude production fell by about 300,000 bpd in the first 3 weeks of March, short of the target cuts of 500,000 bpd.
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