Oil prices remained relatively stable on Wednesday after industry data showed a decline in US crude inventories last week, pointing towards tighter supplies in the market.
Around 1:40 PM, Brent crude futures edged up by 26 cents to $67.89 a barrel, while West Texas Intermediate (WTI) gained 26 cents to $63.67, reported Reuters.
The marginal uptick followed Tuesday’s stronger rally, when both benchmarks climbed by more than $1 a barrel. Gains were primarily fuelled by the continued suspension of Kurdish crude exports via Turkey.
Despite negotiations between Iraq’s federal government, the Kurdish regional government, and international oil companies, exports remain stalled.
Talks have faltered over debt repayment guarantees, delaying a potential agreement to resume shipments of about 230,000 barrels per day, which have been halted since March 2023.
Emril Jamil, senior oil analyst at LSEG, commented, “Prices are expected to remain supported but range-bound in the near term. While Russia’s ongoing supply disruptions support prices, any additional gains are capped by uncertainty due to US Federal Reserve interest rate decisions.”
Inventory trends
According to market sources citing figures from the American Petroleum Institute (API), US crude and gasoline stocks declined while distillate stocks rose last week.
Crude inventories fell by 3.82 million barrels in the week ending 19 September, while gasoline stockpiles dropped by 1.05 million barrels. In contrast, distillate inventories increased by 518,000 barrels.
Traders are now awaiting official US government energy data, due later on Wednesday, which is expected to show a rise in both crude oil and gasoline stockpiles, alongside a possible decline in distillates.
Global supply signals
Further indications of tightening supply have emerged globally. US energy major Chevron will only be able to export around half of the 240,000 barrels per day of crude it produces with partners in Venezuela.
Although Chevron holds a US licence to operate in the sanctions-hit country, fresh restrictions have reduced the flow of Venezuela’s heavy, high-sulphur crude to American refiners.
