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Oil Prices Set for Weekly Loss

Oil Prices Set for Weekly Loss Oil Prices Set for Weekly Loss

Oil prices fell on Friday and were set for a weekly loss as investors sought to book profits, despite tensions in the Middle East which have slashed supplies of crude.

Brent crude was down 35 cents at $56.88 a barrel. US light crude was 45 cents lower at $50.84, CNBC reported.

“There is a little bit of profit-taking,” said Olivier Jakob, chief strategist at consultancy Petromatrix. “The market has really been treading a small range all of this week without any true momentum.”

Oil exports from Iraq’s Kurdistan via the Turkish port of Ceyhan were flowing at average rates on Friday of 216,000 barrels per day down from the usual flows of around 600,000 bpd, a shipping source said.

Iraqi troops regained control of two major oilfields northwest of Kirkuk from Kurdish Peshmerga forces this week, and the Iraqi Oil Ministry expects to bring the fields back on stream on Sunday.

Despite the losses on Friday, analysts said the market was on a path toward rebalancing.

“The oil market has moved into modest undersupply and we expect this will persist at least through the end of the year,” US investment bank Jefferies said.

US commercial stocks of crude oil have dropped 15% from their March records to 456.5 million barrels, below levels seen last year. Part of this drawdown has been due to rising exports as a result of the steep discount of US crude to Brent, which makes it attractive for American producers to export their oil.

Crude oil for immediate use now carries a premium over forward futures, making it profitable to sell oil produced now rather than storing it for sale later.

Shipping data in Thomson Reuters Eikon show overseas US crude oil shipments have soared from virtually zero before the government loosened export restrictions in late 2015 to around 2.6 million bpd in October.

“While outbound shipments recently approached 2 million bpd, our math suggests that physical bottlenecks are unlikely to kick in until waterborne exports approach 3.2 million bpd,” RBC Capital Markets said.

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