Oil prices rose by more than $3 on Monday, as Iraq halted some crude exports from the semi-autonomous Kurdistan region to push prices higher, while news of the takeover of a US bank eased fears regarding a financial crisis.
Brent crude futures settled at $3.13, or 4.2%, at $78.12 a barrel. The price of US West Texas Intermediate crude settled at $72.81 a barrel, up $3.55, or 5.1%.
Brent rose 2.8% last week, while WTI gained 3.8% as concerns regarding the banking sector receded.
Prices received support from Turkey’s cessation of pumping crude from the Kurdistan region through a pipeline following a ruling in an arbitration case confirmed that Baghdad’s approval of a crisis to ship oil, and these exports constitute regarding 0.5% of global oil supplies, or 450 thousand barrels per day.
John Kilduff, a partner at Again Capital in New York, said the loss of oil supplies from Kurdistan might offset the impact of Russian supplies finding their way into the market. It might also lead to production cuts in the Kurdistan Region of Iraq.
First Citizens Bankers said Monday that it would take over the deposits and loans of the collapsed Silicon Valley Bank, thus concluding a chapter of a crisis of confidence that caused turmoil in global financial markets.
“Oil prices are heading higher, extending the gains made in the previous week, as investors assess the authorities’ efforts to calm concerns regarding the global banking system,” said Fiona Cincotta, senior financial markets analyst at City Index.
There are also hopes for additional support for banks following it was reported that the US authorities began deliberations on expanding the emergency lending facility.
Prices also rebounded on concerns of geopolitical turmoil following Russian President Vladimir Putin said he would deploy tactical nuclear weapons in neighboring Belarus.
Russian Deputy Prime Minister Alexander Novak said on Friday that Moscow was close to achieving its goal of reducing crude production by 500,000 barrels per day, to regarding 9.5 million barrels per day.
But data from industry sources and Archyde.com accounts showed that Russia plans to cut refinery operations in April.
As for demand, China’s imports of crude oil are expected to rise by 6.2% in 2023 compared to last year, to 540 million tons, according to an annual forecast issued by a research unit of the China National Petroleum Corporation today.
Archyde.com
