Oil prices react to referendum in Kurdistan| MENAFN.COM

Sunday, 05 February 2023 10:45 GMT

Oil prices react to referendum in Kurdistan

(MENAFN- AzerNews) By Sara Israfilbayova

World oil prices show different tendencies on Friday, as traders fear the possible developments around oil exports from Iraqi Kurdistan and assess the Energy Information Administration's (EIA) data on the U.S. stocks.

Brent crude futures are at $57.2 per barrel, up 0.07 percent, while U.S. West Texas Intermediate (WTI) futures at $51.51 per barrel down 0.1 percent, according to RIA Novosti.

The situation around the export of oil from Iraqi Kurdistan supports oil prices.

Following the referendum on independence, Turkey stated that it will cooperate exclusively with the central government in Baghdad in the matter of oil exports.

Kirkuk, controlled by the Kurdish forces, produces close to 400,000 barrels a day, which makes up almost 10 percent of total Iraqi oil production. The KRI is said to hold 45bn barrels of crude reserves, or around a third of Iraq's total reserves.

Turkey repeated a threat to cut off the pipeline that carries 500,000-600,000 barrels per day (bpd) of crude from northern Iraq to the Turkish port of Ceyhan.

This potential loss, combined with 1.8 million bpd of output reductions by the Organization of the Petroleum Exporting Countries and non-OPEC producers, raised concerns of tighter supply.

'No rapid solution to the crisis can be expected, which should continue to lend support to the oil price, analysts at Commerzbank wrote.

Moreover, investors continue to win back data from the EIA, according to which commercial oil reserves in the U.S. (excluding the strategic reserve) for the week ended on September 22, decreased by 1.8 million barrels, or 0.4 percent - to 471 million barrels. At the same time, analysts predicted an increase in inventories of 3.422 million barrels, or 0.72 percent - to 476.222 million barrels.

Market participants expect the publication of Baker Hughes data, a GE Company (BHGE) on the dynamics of the number of drilling rigs in the United States for the week. Earlier, the number of drilling rigs in the U.S. decreased by eight, or by 0.85 percent, to 936. In annual terms, the number of drilling rigs increased by 430 units, or 1.85 times.

OPEC and 11 major oil producers, including Russia, have committed to output cuts of 1.8 million barrels per day (bpd) until March 2018 to help global supply align with demand.

The oil nations decided to extend production cuts till March 2018 in Vienna on May 25, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.

The next JMMC meeting is scheduled for the day prior to the full ministerial meeting on November 30 in Vienna.

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