The Continued Rise in Oil Prices Supported by a Decline in U.S. Inventories and Disruptions in Supplies from Iraq and Venezuela
Oil prices continued to rise for the second consecutive session on Wednesday, influenced by a set of factors pressuring global supply, most notably a surprising decline in U.S. inventories and increasing disruptions in crude export agreements from Iraq and Venezuela.
The latest data released by the American Petroleum Institute showed a significant decline in energy inventories in the United States for the week ending September 19, with crude oil inventories decreasing by 3.82 million barrels, gasoline inventories down by 1.05 million barrels, while distillate inventories rose by 518 thousand barrels.
The market is awaiting the release of official data from the U.S. Department of Energy today, which is expected to show an increase in crude oil and gasoline inventories, with a potential decrease in distillate inventories.
This trend reflects pressures on supply, pushing prices up in trading, with Brent crude futures rising by 0.1% to record $67.75 per barrel, while West Texas Intermediate crude futures increased by 0.2% to $63.55. This rise extends the strong gains recorded by the two benchmark crudes yesterday, Tuesday, exceeding one dollar per barrel.
The disruption in the agreement to resume oil exports from the Kurdistan region of Iraq has been a major reason behind the previous gains, leading to a halt in flows through the pipeline to Turkey, despite hopes for a settlement to end the deadlock, after two major producers demanded guarantees for debt repayment.
Under the agreement between the Iraqi federal government, the Kurdistan Regional Government, and oil companies, crude exports of about 230 thousand barrels per day, which have been halted since March 2023, will resume.
Additional signs of supply contraction have emerged from another part of the world, as "Reuters" reported that American oil company Chevron will only be able to export half of its daily crude production of 240 thousand barrels, in collaboration with its partners in Venezuela.
It is worth noting that the company had obtained a new license in July to continue operations in Venezuela, but the updated regulations will lead to lower quantities of high-sulfur Venezuelan heavy crude reaching the United States.
