Crude oil prices extended their gains today, after the American Petroleum Institute reported an estimated inventory decline for the week to September 19.
At the time of writing, Brent crude was trading at $67.73 per barrel and West Texas Intermediate was trading at $63.47 per barrel, as the API estimated oil inventories had shed over 3.8 million barrels last week, following another weekly draw of 3.42 million barrels for the week before that.
Earlier in the week, prices took a dip after news broke that Iraq, Turkey, and the Kurdistan regional government had finally reached a deal to restart exports from northern Iraq via the pipeline to Turkey. However, a follow-up revealed unresolved differences between two of the companies operating the fields in Kurdistan, which will delay the restart of exports.
Per a Reuters report, Norwegian DNO and UK Genel have asked for guarantees that the debt accumulated by the Kurdistan regional government with oil producers in the region will be repaid. The regional government has piled up some $1 billion in arrears due to oil producers. DNO, which is the largest oil field operator in Kurdistan, is owed around $300 million.
“Prices are expected to remain supported but range-bound in the near term,” LSEG analyst Emril Jamil told Reuters, noting that news about curbs in Russian fuel exports has contributed to the upward pressure on benchmarks.
Energy Aspects has estimated that damages to Russian refineries from Ukrainian drone strikes have disrupted some 1 million barrels daily in processing capacity. This disruption appears to be affecting diesel exports, with OilX and Vortexa both predicting that this month’s flows could drop to the lowest in five years, according to a Financial Times report.
Russia has had a gasoline export ban for most of this year due to refinery disruption from the drone strikes, but also higher borrowing costs for fuel stations that discouraged stockpiling, Reuters reported earlier this week. Diesel exports have not been restricted deliberately yet.
By Irina Slav for Oilprice.com
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