Oil prices experienced an increase for a second consecutive day on Wednesday, following an industry report indicating a decline in U.S. crude inventories last week. This development has contributed to a prevailing sentiment in the market regarding tightening supplies. Brent futures increased by 27 cents, reaching $67.90 per barrel as of 0005 GMT. U.S. West Texas Intermediate crude futures increased by 28 cents, reaching a price of $63.69.
Both benchmarks experienced an increase of over $1 a barrel on Tuesday, as negotiations to resume exports from Iraq’s Kurdistan encountered obstacles, resulting in a suspension of pipeline shipments of oil from the region to Turkey. This development occurred despite optimistic expectations for a resolution to the impasse, as two significant producers requested guarantees for debt repayment. The accord reached between the federal government of Iraq and the Kurdish regional authorities, alongside oil companies, is set to reinstate exports at a volume of approximately 230,000 barrels per day. Pipeline flows have remained halted since March 2023. Later in the day, figures from the American Petroleum Institute indicated a decline in U.S. crude and gasoline stocks, while distillate stocks experienced an increase last week.
The data indicated a decline in crude stocks by 3.82 million barrels for the week ending September 19, according to sources, while gasoline inventories decreased by 1.05 million barrels and distillate inventories experienced an increase of 518,000 barrels. Official U.S. government energy data is scheduled for release on Wednesday, anticipated to reveal an increase in both crude oil and gasoline inventories, alongside a probable decrease in distillates.
Additional indicators of constrained supply are evident, as reports indicated that U.S. major Chevron will be able to export only approximately half of the 240,000 bpd of crude it produces in partnership with Venezuela. In July, the company obtained a new authorization to operate in the sanctioned country; however, the revised regulations will result in a reduced volume of heavy, high-sulphur crude from Venezuela reaching the U.S.