Oil prices dipped in Thursday’s Asian trading, pulling back from the seven-week highs reached in the previous session, as investors booked profits amid concerns over softer winter demand and the resumption of Kurdish oil supplies.
Brent crude futures eased 19 cents, or 0.3%, to $69.12 a barrel by 0637 GMT, while U.S. West Texas Intermediate (WTI) futures fell 22 cents, or 0.3%, to $64.77 a barrel. Both benchmarks had climbed 2.5% on Wednesday, marking their strongest levels since August 1, driven by an unexpected drop in U.S. weekly crude inventories and fears that attacks by Ukraine on Russian energy infrastructure could disrupt supplies.
“Oil prices are hovering above our expectations,” said Suvro Sarkar, the energy sector team lead at DBS Bank. “We would expect profit-taking to emerge at current levels and oil prices to slowly moderate hereon as we enter the slower winter demand season.”
Concerns about supply fundamentals also added downward pressure, with increased output expected soon from Iraq and Kurdistan.
“The return of Kurdish supplies adds back fears of an oversupply narrative, propelling a pullback in prices that hover near a seven-week high,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. Oil flows from Iraqi Kurdistan were anticipated to resume in the coming days after eight oil companies reached an agreement with Iraq’s federal and Kurdish regional governments on Wednesday.
While worries over Russian supply disruptions persist, Haitong Securities noted that a key factor sustaining oil prices has been the absence of significant downward pressure from supply–demand fundamentals in recent weeks. As peak demand season wanes, prices have not yet fully factored in the potential for oversupply.
Highlighting the cautious sentiment on demand, J.P. Morgan analysts noted on Wednesday that U.S. air passenger traffic in September showed only a modest 0.2% year-on-year increase, a slowdown from the 1% growth recorded in each of the previous two months.
“Likewise, U.S. gasoline demand has started to pull back, mirroring the broader moderation in travel trends,” the analysts added.
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