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Oil prices settle up on demand forecasts, Kurdistan tensions
[NEW YORK] Oil prices rose for the third day on Wednesday as Opec forecast higher demand for 2018 and heightened tensions in Kurdistan supported prices.
Brent crude futures rose 33 cents, or 0.6 per cent, to settle at US$56.94 per barrel. Brent rose 2 per cent the previous day.
US West Texas Intermediate (WTI) crude futures rose 38 cents, or 0.8 per cent, to US$51.30 a barrel.
The Organization of the Petroleum Exporting Countries forecast stronger demand for its oil in 2018 and said production cuts by producing nations were clearing the global crude glut.
US oil exports are pouring into the market at a record pace, but the world's second largest crude trader Glencore said the market can absorb the volumes along with those from the North Sea and West Africa.
"I think the market is able to absorb that 2 million bpd of US exports easily," Glencore's head of oil trading Alex Beard told the Reuters Global Commodities Summit. "I don't think there are many losers out there." Saudi Arabia said it pumped 9.97 million barrels per day in September, up from August, but still below target.
Opec and other producers, including Russia, agreed to cut output by 1.8 million barrels per day (bpd).
The United States is not party to the deal, and its crude output has risen 10 per cent this year to more than 9.5 million bpd.
After settlement, crude prices pared gains when the industry group the American Petroleum Institute said its data showed US crude stocks rose unexpectedly last week, while petrol inventories decreased and distillate stocks built.
API said crude inventories rose 3.1 million barrels in the week to Oct 6. Analysts had expected a draw of 2 million barrels. The US Department of Energy reports official data on Thursday.
Rob Haworth, senior investment strategist at US Bank Wealth Management said Opec and oil bulls were "hoping US producers slow down production and make further progress on inventory cuts." He said the picture was "not clear because you still have hurricane related news."
Iraqi government forces and Iranian-trained Iraqi paramilitaries are "preparing a major attack" on Kurdish forces in the oil-rich region of Kirkuk and near Mosul in northern Iraq, the Kurdistan Regional Government (KRG) said.
Although an Iraqi military spokesman denied any attack, John Kilduff, a partner at Again Capital LLC, said "worries over Kurdistan are helping...get us back over 51."
Monroe Energy, a subsidiary of Delta Air Lines Inc , was shutting its 185,000 barrel-per-day Trainer, Pennsylvania, refinery due to a fire on Wednesday, a source familiar with the plant's operations said.
News of the outage sent US petrol margins RBc1-CLc1 up as much as 4.4 per cent to a session high of US$16.62 a barrel.