Oil prices buoyed by persistent Middle East tensions

Gold Daily

That, along with Iraqi forces taking control of Kurdish oil facilities in Northern Iraq, are threatening supply.

In response, USA crude climbed 0.9 percent to $51.92 a barrel, not far from $52.85 touched late last month - a level not seen since April. If prices remain high the outlook may be positive for breakbulk operators serving the oil sector as the higher price point supports renewed investment in offshore development.

Crude flows through the 600,000 barrel-per-day (bpd) Kurdish pipeline to the Turkish port of Ceyhan have dropped off sharply to around 225,000 bpd, a shipping source told Reuters.

Civilian workers at both fields were reportedly sent home following a build-up of Iraqi military forces around the sites.

Iraq is second-largest oil producer at the Organization of the Petroleum Exporting Countries.

Birol said the rate of compliance by OPEC and its partners in their targeted cutting of about 1.8 million barrels per day between January this year and March 2018 was about 86 percent.

The global benchmark hits its highest in three weeks earlier in the session at $58.54 a barrel because of ongoing tensions around oil-rich Iraq and Iran, which raised risk premiums.


In any case, Kirkuk is not in the territorial zone of the autonomous Kurdish area, whose leaders recently won a referendum on national independence from Iraq.

The crude oil prices were also supported by worries over renewed US sanctions against Iran as on Friday, President Donald Trump refused to certify to Congress that Tehran is complying with the 2015 Iran nuclear agreement.

OPEC and 10 producers outside the cartel, including Russian Federation, first agreed late previous year to cap their production at around 1.8 million barrels a day lower than peak October 2016 levels, with the aim of alleviating global oversupply and boosting prices. Last Friday U.S. President Donald Trump refused to certify Iran's compliance over a nuclear deal, leaving Congress 60 days to decide further action against Tehran.

If no other countries support the US push for more sanctions, Iran's production is unlikely to drop by 1 million bpd, according to Goldman.

In an otherwise typically quiet Monday market, the price of Crude Oil is up nearly 1.7% since this week's open, as at the time of writing.

The price of crude oil is seeing a steady decline. It last stood at $7,110.5.

“We see Brent averaging $54 this quarter and $52.50 per barrel in 1H18, compared with our previous forecasts of $50 and $49.50 per barrel, respectively, ” Bank of America Merrill Lynch said.

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