Oil pares gains as USA fuel stockpiles rise

Oil pares gains as USA fuel stockpiles rise

On October 10, 2017, the Brent-WTI spread was $5.69.

The Iraqi government also plans to increase oil production from the region to more than a million barrels per day, with a foreign oil company to be contracted to implement the plan, according to the minister.

After months of range-bound trading during which OPEC-led supply cuts supported crude prices but rising US output capped markets, prices have moved up significantly this month just as demand looks stronger than at any point in recent months, especially in China. Brent crude advanced by 20 cents to $58.02 a barrel (bbl) by 6:35 a.m. CST (11:35 GMT), up by about a third from its mid-year levels.

The ongoing political friction between the United States and Iran also increased the global risk for oil.

Jakob said Brent was unlikely to push above $60 a barrel because that level would encourage increased hedging from us shale producers and less compliance among members of the Organization of the Petroleum Exporting Countries with their deal to curb output.

In any case, Kirkuk is not in the territorial zone of the autonomous Kurdish area, whose leaders recently won a referendum on national independence from Iraq.

A risk premium has returned to oil markets with a vengeance, boosting global price benchmarks as escalating fighting in Iraq threatens supplies while political tensions loom between the United States and Iran.

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Asked about the conflict in Iraq between the government and separatist Kurds and the U.S. decision to decertify its nuclear deal with Iran, Birol said it is premature to assess the impact of these geopolitical risks on oil markets. There were unconfirmed reports that Kurdish forces had shut around 350,000 barrels per day (bpd) of oil production from major fields.

On Friday, U.S. President Donald Trump said he was officially withdrawing his certification of Iranian compliance with the nuclear deal, in what is being billed as part of a tougher strategy on Iran.

Iraq is second-largest oil producer at the Organization of the Petroleum Exporting Countries.

OPEC producers have struggled to maintain caps on their output quotas, and Iran has said it supports an extension of the current production cut deal to the end of next year.

The American Petroleum Institute (API), an industry trade group, will release USA weekly petroleum inventory data at 4:30 p.m. EDT (2030 GMT), ahead of the government's report on Wednesday.

Miners are the biggest decliner, shedding 1.03% on lower metals prices. "Collectively, OPEC countries lost more than $1 trillion". Both contracts traded up almost 1 percent and down over 1 percent during the day.

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