Oil prices fell today, Thursday, with the rise of the dollar, as investors closely monitor developments regarding the reduction of oil exports from the Kurdistan region of Iraq.
By 04:46 GMT, Brent crude futures fell 24 cents, or 0.31%, to $78.04 a barrel. US West Texas Intermediate crude fell 18 cents, or 0.25%, to $72.79 a barrel.
The dollar index, which is moving in a general direction opposite to oil, rose 0.11% today, Thursday, to 102.75. The strength of the dollar makes commodities denominated in it more expensive for holders of other currencies, according to Archyde.com.
Companies data showed that producers in the semi-autonomous Kurdistan region in northern Iraq suspended or reduced their oil production after stopping oil exports from a pipeline in northern Iraq, with more disruptions expected in the future.
But Citi analysts said on Thursday: “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.
Meanwhile, an unexpected drop in US crude oil inventories limited the price decline. Imports fell to the lowest level in two years, according to the US Energy Information Administration.
Crude oil inventories fell by 7.5 million barrels in the week ending March 24 to 473.7 million barrels, compared with analysts’ expectations in a Archyde.com poll for an increase of 100,000 barrels.
Analysts from the National Australia Bank said: “A seasonal increase in demand by the end of the second quarter is expected to lead to a rise in (oil) prices from current levels.”
At the same time, lower-than-target cuts in Russian crude production eased supply concerns.
Sources familiar with the data told Archyde.com that Russian crude production fell by about 300,000 barrels per day in the first three weeks of March, less than the target cuts of 500,000 barrels per day.