Oil Prices Rise Amidst Resumption of Iraq Export
Oil prices saw moderate uptick in the global commodity market on Monday amidst talk of a potential restart in oil exports from Iraq’s Kurdistan region. Despite the downward pressure on oil prices through much of last week, the market still managed to eke out a small gain with Brent settling 0.11% higher on the week, ING says in a note.
Data showed that Brent crude price has increased by 0.2%, trading at $74.54 per barrel on Monday. Also, the US benchmark West Texas Intermediate (WTI) increased by 0.1%, reaching $70.67 per barrel, compared to its prior session close of $70.56..
The oil market is expected to continue to face pressures amidst expectation that oil exports from Iraq’s Kurdistan region could resume in March, which could see exports of around 300,000 b/d through the Ceyhan pipeline.
Commodities strategists at ING said flows were halted in early 2023 after a payment dispute between Iraq and Turkey. However, this is not the first time analysts have heard suggestions that exports could restart. “if flows were to resume it would complicate issues around Iraqi output and its compliance with production targets under the OPEC+ deal”, ING stated..
Meanwhile, expectations are growing that the Fed might implement 2 interest rate cuts throughout the year. Experts suggest these cuts could drive oil prices higher, supported by a weaker dollar and a boost in economic activity.
The depreciation of the US dollar is expected to make oil more affordable for buyers using other currencies. Interest rate cuts aimed at supporting economic growth could drive higher demand in oil-dependent sectors, including industrial production and transportation.
Moreover, US President Donald Trump’s directive last week for trade and economic officials to develop ‘reciprocal tariffs’ targeting countries that impose tariffs on US goods continues to heighten the risk of a global trade war.
These measures could complicate the fight against inflation in the US, while the country’s trading partners might experience production challenges due to additional tariffs.
Experts warn that widespread tariffs could have a long-term negative impact on global growth, potentially triggering a trade war that reignites inflation, which could, in turn, push oil prices higher.
On the other hand, the potential for a peace agreement between Russia and Ukraine continues to cap price increase.
A Russian newspaper has reported that a Russia-US meeting on Ukraine will take place on Tuesday in Saudi Arabia, while American media outlets have revealed that Kyiv was not invited to participate in the discussions.
According to the Russian daily Kommersant, citing sources within the Kremlin, the Russian delegation will be led by Foreign Minister Sergey Lavrov, while the US negotiation team will be headed by Secretary of State Marco Rubio.
In a phone conversation last Wednesday, Trump and Russian President Vladimir Putin agreed to arrange talks on a resolution to the Ukrainian conflict as soon as possible. Trump made ending the Moscow-Kyiv war a key component of his presidential election campaign.
As efforts to bring an end to the war continue, market players are becoming less worried about supply disruptions, which is putting downward pressure on oil prices #Oil Prices Rise Amidst Resumption of Iraq Export Ministry Seeks $2 billion Fibre Optics Funding
