© Reuters. Pumps operate at the Kern River oil field in California (Reuters Photo).
HOUSTON (Reuters) – Oil prices rose more than $3 on Monday, as Iraq’s halt to some crude exports from the semi-autonomous Kurdistan region pushed prices higher and news of the takeover of a U.S. bank eased concerns about a financial crisis.
Crude futures settled up 3.13, or 4.2 percent, to $78.12 a barrel. The price of US West Texas Intermediate crude settled at $72.81 a barrel, up $3.55, or 5.1 percent.
Brent rose 2.8 percent last week, while WTI gained 3.8 percent as concerns about the banking sector receded.
And prices received support from stopping pumping crude from the Kurdistan region through a pipeline after a ruling in an arbitration case confirmed that Baghdad’s approval was required to ship oil. These exports constitute about 0.5 percent of the world’s oil supply, or 450,000 barrels per day.
John Kilduff, a partner at Again Capital in New York, said the loss of oil supplies from Kurdistan could offset the impact of Russian supplies finding their way into the market. It could also lead to production cuts in the Kurdistan Region of Iraq.
And First Citizens Bankers said on Monday that it would take over the deposits and loans of the collapsed Silicon Valley Bank, thus concluding a chapter of a crisis of confidence that caused turmoil in global financial markets.
“Oil prices are heading higher, extending the gains made in the previous week, as investors assess the authorities’ efforts to calm concerns about the global banking system,” said Fiona Cincotta, senior financial markets analyst at City Index.
There are also hopes for additional support for banks after it was reported that the US authorities began deliberations on expanding the emergency lending facility.
Prices also rebounded on concerns of geopolitical turmoil after Russian President Vladimir Putin said he would deploy tactical nuclear weapons in neighboring Belarus.
Russian Deputy Prime Minister Alexander Novak said on Friday that Moscow was close to achieving its goal of cutting crude production by 500,000 barrels per day (bpd) to around 9.5 million bpd.
However, data from industry sources and Reuters accounts showed that Russia intends to cut refinery operations (TADAWUL:) in April.
As for demand, China’s imports are expected to rise by 6.2 percent in 2023 compared to last year, to 540 million tons, according to an annual forecast released by a research unit of China National Petroleum Corporation on Monday.
(Prepared by Hassan Ammar, Amira Zahran, Muhammad Ali Faraj and Doaa Muhammad for the Arabic Bulletin)