Oil keeps gains, supported by Iraq disruptions and drop
in U.S. rigs
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[October 23, 2017]
By Karolin Schaps
AMSTERDAM (Reuters) - Oil prices largely
held on to last week's gains on Monday, supported by supply disruptions
in Iraq and a drop in U.S. drilling.
However, the reduction in drilling rigs in the United States could be
temporary, analysts said, as activity had been restrained by hurricane
The number of U.S. rigs drilling for new oil fell by seven to 736 in the
week to Oct. 20, the lowest level since June, energy services firm Baker
Hughes said on Friday. <RIG-OL-USA-BHI>
Global benchmark Brent crude <LCOc1> was trading at $57.56 a barrel at
0957 GMT, down 19 cents.
U.S. West Texas Intermediate (WTI) crude <CLc1> was up 2 cents at
"The market is in a tug of war between short-term bullish drivers which
are very true, very visible and very strong versus real concerns for the
oil market balance for 2018," said Bjarne Schieldrop, chief commodities
analyst at SEB Markets.
One bullish factor is supply disruptions in northern Iraq, where
tensions have been running high since the Kurdistan region's vote in
favor of independence last month.
As of Sunday, oil exports from Iraq's Kurdistan via the Turkish
Mediterranean port of Ceyhan were still flowing at sharply reduced rates
between 200,000 and 250,000 barrels per day, two shipping sources said.
Flows had increased slightly to 255,000 bpd by Monday, one source said.
Typically, the pipeline transports around 600,000 bpd.
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Crude oil is dispensed into a bottle in this illustration photo June
1, 2017. REUTERS/Thomas White/Illustration
Iraqi Oil Minister Jabar al-Luaibi said on Saturday oil exports were
increasing from the southern Basra region by 200,000 bpd to make up for
a shortfall from the northern Kirkuk fields.
In a landmark visit to Iraq, Saudi Arabia's Energy Minister Khalid al-Falih
praised the two countries' collaboration within the Organization of the
Petroleum Exporting Countries to cut production in an effort to prop up
Iraq said the two countries would continue to cooperate in implementing
decisions by oil-exporting countries.
The remarks come just over a month ahead of the group's next scheduled
meeting, at which the oil exporters are expected to announce further
decisions on their production-curbing deal.
"The market looks considerably different now than it did just a few
months ago and signals coming from the organization itself and member
countries continue to be constructive for prices," analysts at JBC
The crude oil volatility index, which measures market expectations for
30-day price volatility, fell to levels similar to those seen in 2014
(Additional reporting by Henning Gloystein in Singapore; Editing by Dale
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