Iraq, Iran, US "raise" oil prices

Brent Crude

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. Oil prices have climbed following API inventory data, which revealed a 7.1 million barrel decline in US crude inventories, versus expectations for a 4 million barrel draw. This is months after of range-bound trading during which OPEC-led supply cuts buoyed crude prices but rising US output capped markets.

In response, US 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.

Oil prices traded higher Wednesday, supported by ongoing political tensions in the Middle East.

Iraqi Government forces previously captured the city of Kirkuk from Kurdish forces.

Major producers including OPEC members had past year chose to curb crude oil production to 18 lakh barrels per day in order to push the prices to approximately Rs 3900 per barrel.

Oil prices ended little changed on Tuesday, steadying after earlier gains and losses, as expectations of high USA production and exports offset concerns that fighting between Iraqi and Kurdish forces could threaten the country's crude output.




Overnight, crude oil prices settled higher on Wednesday after OPEC said demand for oil is set to increase in 2018 raising investor expectations that higher demand will rein in excess supplies.

The Organization of the Petroleum Exporting Countries, OPEC, made their decision to extend cuts in oil output by nine months by March 2018, delegates said.

U.S. President Donald Trump on Friday refused to certify Iran's compliance over a nuclear deal, leaving Congress 60 days to decide on further action against Tehran.

As a number of geopolitical problems unfold, oil prices maintained gains on Tuesday, while Goldman Sachs said oil production from Iraq's Kurdistan region was likely to be jeopardized by the standoff with Iraq. "These issues remind us oil and geopolitics are very much interlinked and it will remain so".

The upbeat forecast for oil demand growth, however, was offset by a rise in OPEC production by 90,000 barrels a day, fueling concerns that OPEC compliance with the deal to curb output is starting to wane. It may take time to break above; meanwhile, crude oil prices could travel between $50 to $52.30 levels.

Initial estimates Tuesday from the American Petroleum Institute, an industry group, showed a 7.1 million barrel decrease in crude supplies last week.

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