Oil prices rose on Monday after Iraq was forced to halt some of its crude exports from its semi-autonomous Kurdistan region and helped by steps to contain a potential banking crisis that could have hit oil demand. Brent crude futures were up $1.66, or 2.2%, at $76.65 a barrel. West Texas Intermediate U.S. crude rose $1.91, or 2.7%, to $71.18. Brent gained 2.8% last week while WTI rebounded by 3.8% as jitters in the banking sector eased. About half a percent of global oil supply, or 450,000 barrels per day, of crude exports from Kurdistan stopped on Saturday after a victory in an arbitration case confirmed Baghdad’s consent was needed to ship the oil from Turkey. That could also force cuts to oil production in the Kurdistan region.
Meanwhile, First Citizens Bancshares Inc said it will acquire the deposits and loans of failed Silicon Valley Bank, closing one chapter in the crisis of confidence that has ripped through financial markets. “Oil prices are edging higher extending gains from the previous week as investors weighed up efforts by the authorities to calm concerns regarding the global banking system,” said Fiona Cincotta, Senior Financial Markets Analyst at City Index. There are also hopes for extra support for bank funding after reports that U.S. authorities were in early deliberations about expanding emergency lending facilities.
Oil prices also drew support from Russian President Vladimir Putin’s plans to station tactical nuclear weapons in Belarus. The move is one of Russia’s most pronounced nuclear signals yet and a warning to NATO over its military support for Ukraine, which has called for a meeting of the U.N. Security Council in response. NATO slammed Putin for what it called his “dangerous and irresponsible” nuclear rhetoric. That comes as Russia’s Deputy Prime Minister Alexander Novak has said that Moscow is close to achieving its target of cutting crude output by 500,000 barrels per day (bpd) to about 9.5 million bpd.
But Russia’s crude exports are expected to remain steady as it cuts refinery output in April, data from industry sources and Reuters calculations showed on Friday. Russia’s oil products exports have been hit harder than its crude exports by a recent European Union embargo, with tonnes of diesel stuck on ships awaiting buyers. On the demand side, China’s crude oil imports are expected to rise 6.2% in 2023 on last year’s level to 540 million tonnes, according to an annual forecast by a research unit of China National Petroleum Corp on Monday.
