Oil gains for 3rd day on Kurdish supply concerns, easing banking fears (updated)

First Citizens Bancshares (Tennessee)

29/03/2023 05:03

(Updates prices; adds last para)
    By Yuka Obayashi and Trixie Sher Li Yap
       March 29 (Reuters) - Crude prices rose for a third
session on Wednesday as a halt to some exports from Iraqi
Kurdistan raised concerns of tightening supplies and fears of a
global banking crisis eased. 
        Brent crude futures  LCOc1  climbed 42 cents, or 0.53%,
to $79.07 a barrel by 0656 GMT, while West Texas Intermediate
U.S. crude  CLc1  increased 60 cents, or 0.82%, to $73.80 a
barrel. 
  
    "Worries over reduced supply from Iraq's Kurdistan region
and a relief in financial markets worried about the banking
sector turmoil continued to boost investors' risk appetite,"
said Satoru Yoshida, a commodity analyst with Rakuten
Securities. 
    "Expectations that the U.S. Federal Reserve will keep a
cautious stance in raising interest rates because of banking
stress also increased hopes for a stronger global economy and
oil demand," Yoshida said, predicting the bullish tone would
continue this week. 
    Oil prices rallied this week after exports of 450,000
barrels per day (bpd) from Iraq's semi-autonomous northern
Kurdistan region were halted, following an arbitration decision
that confirmed Baghdad's consent was needed to ship the oil.
        Barclays said on Tuesday any protracted outage of
Kurdish exports through the end of the year would imply a $3 a
barrel upside to its $92-a-barrel price forecast for Brent in
2023. 
    Monday's announcement that First Citizens BancShares Inc
will acquire failed Silicon Valley Bank also spurred optimism
about the condition of the global banking sector. 
    "The recent rebound in oil prices is mainly driven by
sentiment. We can see that risk sentiment has recovered to some
extent, which pushed (the) global stock markets and crude oil
rebound," said CMC Markets analyst Leon Li. 
    A drawdown in U.S. crude oil inventories last week also lent
support. U.S. crude oil inventories fell by about 6.1 million
barrels in the week ended on March 24, according to market
sources citing American Petroleum Institute figures on Tuesday.
Gasoline inventories fell by about 5.9 million barrels, while
distillate stocks rose by about 550,000 barrels.  API/S  
    Analysts had expected to hear that U.S. crude oil stockpiles
rose last week, while distillate and gasoline inventories were
seen down. The U.S. Energy Information Administration will
release its weekly report at 10:30 a.m. (1430 GMT) on Wednesday.
    On the supply side, Russian Deputy Prime Minister Alexander
Novak said on Tuesday that Moscow needed to focus on boosting
energy exports to so-called friendly countries and noted that
Russian oil supply to India registered a 22-fold jump last year.
    Separately, worries about the sustainability of demand
growth in China capped price gains as a Reuters poll on
Wednesday showed that the country's factory activity expanded at
a slower pace in March. Official data is expected on Friday. 
        
  

 (Reporting by Yuka Obayashi in Tokyo and Trixie Yap in
Singapore; Editing by Tom Hogue and Bernadette Baum)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))