Brent oil edges up, near 26-month high amid supply concerns
JAKARTA (Reuters) – Brent oil prices rose on Wednesday to sit not far off 26-month highs hit in the previous session amid threats from Turkey that it could cut crude exports from Iraq’s Kurdistan region.
Brent crude for November delivery was up 21 cents, or 0.4 percent, at $58.65 a barrel by 0240 GMT. It settled down 1 percent on Tuesday, after earlier hitting $59.49, its highest since July 2015 and more than 34 percent above a 2017 low.
US crude for November delivery rose 24 cents, or 0.5 percent, to $52.12, having settled down 0.7 percent after hitting a five-month high of $52.43 on Tuesday.
Oil prices have been supported by output curbs by the Organization of Petroleum Exporting Countries (OPEC) and other major producers, although US crude has lagged behind Brent amid concerns that US production-growth could stoke oversupply.
“Going forward, oil is likely to remain supported as supply disruptions, combined with solid global demand, will probably continue to lift prices,” ANZ said in a research note, referring to supply disruptions in the United States due to rough weather in the Atlantic.
Monroe Energy, a subsidiary of Delta Air Lines, ran out of crude oil at its 185,000 barrel-per-day Trainer, Pennsylvania, refinery amid shipping delays due to rough seas caused by Hurricanes Jose and Maria, according to a source familiar with the company’s operations and Reuters shipping data.
US crude supplies have been rising as imports and production recover in the aftermath of Hurricane Harvey, while refineries have been slower to restart.
The US Energy Information Administration (EIA) releases stocks data later on Wednesday. US crude inventories were seen rising for a fourth straight week, while refined product stockpiles likely fell last week, an extended Reuters poll showed on Tuesday.
Turkish President Tayyip Erdogan repeated on Tuesday 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, intensifying pressure on the Kurdish autonomous region over its independence referendum.
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.