Oil prices have climbed following API inventory data, which revealed a 7.1 million barrel decline in USA crude inventories, versus expectations for a 4 million barrel draw. E&P reports in its article Oil Prices Build As Iraq, US-Iran Tension Raises Risks that after months of rangebound trading, during which OPEC-led supply cuts supported crude but rising USA output capped markets, prices have made significant gains this month. As per the report, "Brent crude was trading over $1 higher at $58.35 per barrel, while US West Texas Intermediate jumped 88 cents to $52.31".
Oil jumped nearly 3% over the past two sessions as weeks of tensions following a Kurdish independence referendum flared into open conflict in the Kirkuk region.
SINGAPORE, Oct 17 (Reuters) - A risk premium has returned to oil markets, boosting global prices as escalating fighting in Iraq threatens supplies while political tensions loom between the United States and Iran.
"It remains to be seen whether the Kurds, after withdrawing from the region they claim to be entitled to, will allow crude oil to be transported by pipeline across their territory to the Turkish Mediterranean port of Ceyhan", said analysts at Commerzbank.
Major producers including OPEC members had a year ago made a decision to curb crude oil production to 18 lakh barrels per day in order to push the prices to approximately Rs 3900 per barrel. U.S. President Donald Trump on October 13 refused to certify Iran's compliance over a nuclear deal, leaving Congress 60 days to decide on further action against Tehran.More news: Cow on the Loose in Prospect Park, Police Say
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Miners are the biggest decliner, shedding 1.03% on lower metals prices. The group is managing the global glut of crude oil after noticing the prices halve and revenues dip sharply in the recent times. "Without the support of other countries, it appears unlikely that production would fall by one million barrels a day" to levels before world powers reached a deal with the Persian Gulf state to curb its nuclear program, the bank's analysts said. "These issues remind us oil and geopolitics are very much interlinked and it will remain so".
Iraq is second-largest oil producer at the Organization of the Petroleum Exporting Countries.
Australian shares .axjo extended their winning streak to a fourth straight session to rise 0.6 percent, while Japan's Nikkei .n225 rallied for a sixth day to the highest since November 1996.
The American Petroleum Institute (API), an industry trade group, will release US weekly petroleum inventory data at 4:30 p.m. EDT (2030 GMT), ahead of the government's report on Wednesday.
"We see Brent averaging $54 this quarter and $52.50 per barrel in 1H18, compared with our previous forecasts of $50 and $49.50 per barrel respectively", it said.