(Bloomberg) — Oil rose as traders weighed supply disruptions in Iraq against a strong rebound in the dollar.
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West Texas Intermediate crude traded near $67 a barrel after earlier rising as much as 1.2%. On the supply side, US crude inventories slid last week and Iraq has lost about 200,000 barrels a day of oil production due to drone attacks on several fields in Kurdistan. Chevron Corp. said it was on the cup of reached a production plateau in the largest US oil field.
“While inventories globally have built very significantly, stocks in the pricing centres – especially in the US – are still quite low,” Daan Struyven, head of oil research at Goldman Sachs, said on Bloomberg Television. Market focus has shifted to “downside risks to supply,” he said.
Still, the US dollar strengthened — typically a bearish indicator for commodities — as anxiety abated over the future of Federal Reserve Chair Jerome Powell.
Iraq, meanwhile, approved a plan for its semi-autonomous Kurdish region to resume oil exports that have been halted since March 2023. The Kurdistan Regional Government will eventually supply Iraq’s state oil marketer SOMO with 230,000 barrels a day, people familiar with the matter said.
Supply concerns were also reflected in the forward curve for crude. It is currently trading in backwardation, where a premium is paid for sooner delivery over longer-dated contracts.
In the US, distillate stockpiles remain at the lowest seasonal level since 1996 even after last week’s increase.
–With assistance from Yongchang Chin and Sarah Chen.
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