Oil is almost flat on Thursday as investors watched developments on Iraq’s oil exports closely, as a surprise drop in US crude inventories offset a smaller-than-expected cut in Russian supplies.
Brent crude futures fell 5 cents, or 0.1%, at 0630 GMT to $78.23 a barrel, while West Texas Intermediate (WTI) crude rose 12 cents, or 0.2%, to $73.09 a barrel.
Following the shutdown of the northern Iraq pipeline, producers closed several oil fields or reduced production in northern Iraq, and more disruptions are expected on the horizon, according to the statements.
But Citi analysts said on Thursday that the region’s premium in oil prices could disappear sooner than expected. With pipeline flow estimated to increase by around 200,000 barrels per day, changes in Iraq’s domestic policy could soon lead to a lasting political solution.
Meanwhile, the unexpected drop in US crude inventories limited price declines as imports fell to a two-year low, according to the US Energy Information Administration (EIA).
Crude inventories fell 7.5 million barrels to 473.7 million barrels in the week of March 24, while analysts’ survey expectations were for an increase of 100,000 barrels.
Gasoline inventories, however, fell 2.9 million barrels to 226.7 million barrels, compared to analysts’ forecast for a decline of 1.6 million barrels.
At the end of the second quarter, a seasonal strengthening in demand is expected to push oil prices higher than current levels.
Oil prices remained within the trading band seen since the beginning of 2023, despite softening slightly on Thursday, analysts say.
Meanwhile, Russia’s lower-than-targeted cuts in crude oil production eased supply concerns.
Sources close to the data said Russia’s crude oil production fell by about 300,000 barrels per day in the first three weeks of March, well below the targeted cut of 500,000 barrels per day.
