Oil prices remained mostly steady on Wednesday after industry data indicated a drop in U.S. crude inventories last week, contributing to market expectations of tighter supply conditions.
Brent futures inched up 3 cents to $67.66 per barrel by 06:30 GMT, while U.S. West Texas Intermediate (WTI) crude gained 5 cents to reach $63.46. Both benchmarks had climbed over $1 a barrel on Tuesday following a stalled deal to resume oil exports from Iraq’s Kurdistan, which halted pipeline shipments to Turkey despite ongoing hopes for an agreement, as two major producers requested debt repayment guarantees.
The proposed accord between Iraq’s federal government, the Kurdish regional authorities, and oil companies would allow roughly 230,000 barrels per day to flow again. Pipeline operations have been halted since March 2023.
“Prices are expected to remain supported but range-bound in the near term,” said Emril Jamil, a senior analyst for oil at the LSEG.
Jamil noted that while continuing supply disruptions from Russia are bolstering prices, further increases are limited by uncertainties surrounding U.S. Federal Reserve interest rate decisions.
Data from the American Petroleum Institute (API) indicated that U.S. crude and gasoline inventories fell last week, while distillate stockpiles rose, according to market sources referencing the API figures. Crude inventories dropped by 3.82 million barrels in the week ending September 19, gasoline supplies fell by 1.05 million barrels, and distillate stocks increased by 518,000 barrels.
Official energy reports from the U.S. government are expected later Wednesday, likely showing gains in both crude and gasoline inventories, with a probable decline in distillates.
Signs of tightening supply are also evident elsewhere. Reuters reported that Chevron, a major U.S. oil company, will only be able to export roughly half of the 240,000 barrels per day of crude it produces in partnership with Venezuela.
Although the company received authorization to operate in the sanctioned country in July, new regulations mean a smaller portion of Venezuela’s heavy, high-sulfur crude will reach the U.S. market.
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