Brent, WTI Prices Pick Up

Oil prices rose on Wednesday as weekly US crude inventories were expected to have fallen steeply and geopolitical tensions around oil-rich Iraq and Iran raised risk premiums.

International benchmark Brent crude futures were trading 41 cents higher at $58.29 a barrel. US West Texas Intermediate crude futures traded at $52.03 a barrel, up 15 cents on the day, CNBC reported.

Weekly US crude inventories fell by 7.1 million barrels in the week to Oct. 13 to 461.4 million barrels, the American Petroleum Institute said late on Tuesday. Official US fuel inventory data were due on Wednesday from the Energy Information Administration.

“There are market expectations for a bullish EIA inventory report so Brent is heading towards $60 a barrel again,” said Hans van Cleef, senior energy economist at ABN Amro.

Oil market investors were also closely following developments in the Middle East where tensions in northern Iraq were threatening to disrupt oil flows. Iraqi government forces captured the major Kurdish-held oil city of Kirkuk earlier this week, responding to a Kurdish independence referendum.

“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.

The Iraq crisis adds to a looming dispute between the US and Iran. US President Donald Trump last week refused to certify Iran’s compliance over a nuclear deal, giving the US Congress 60 days to decide further action against Tehran.

During the previous round of sanctions against Iran, some 1 million barrels per day of oil were cut from global markets.

A technical pattern known as a “Golden Cross” was approaching in WTI crude oil contracts on Wednesday, in which the 50-day moving average climbs higher than the 200-day. This is widely seen as a bullish price indicator and already occurred with Brent futures on Sept. 25.