Crude Oil Down In Asia On Profit Taking As Tensions In Iraq Watched
Investing.com – Crude oil prices fell in Asia on Tuesday on profit taking after sharp gains on geopolitical tensions in Iraq and Iran stoked buying.
On the New York Mercantile Exchange crude futures for November delivery fell 0.19% to $51.77 a barrel, while on London’s Intercontinental Exchange, Brent dipped 0.02% to $57.81 a barrel.
Later Tuesday the American Petroleum Institute (API) will release its estimates of U.S. crude and refined product stocks to be followed by official data on Wednesday from the Energy Information Administration (EIA).
Crude oil inventories are seen down by 4.750 million barrels, while gasoline stocks are seen down by 1.0 million barrels and distillates off by 1.5 million barrels. The API and EIA figures often diverge.
Overnight, crude oil prices settled higher on Monday as conflict between Iraqi and Kurdish forces broke out in the oil-rich city of Kirkuk raising concerns over supply disruptions in the region.
Oil prices surged on the back of concerns over supply disruptions in Iraq – the second largest Opec producer – after Iraqi forces marched into the oil-rich city of Kirkuk amid rising tensions between Baghdad and the Kurdistan Regional Government (KRG).
The show of force from Iraqi forces comes after weeks of unrest in the region which followed the KRG’s vote for independence in a Sept. 25 referendum. Kirkuk accounts for 200,000 barrels per day (bpd) of the roughly 600,000 bpd of oil produced in the KRG region.
Also supporting an uptick in crude oil prices were concerns over renewed U.S. sanctions against Iran after President Donald Trump on Friday refuse to certify to Congress that Tehran is complying with the 2015 Iran nuclear agreement.
Under the agreement, Iran agreed to restrict its nuclear programme for at least 10 years in exchange for lighter economic sanctions that had crippled its economy, wiping out nearly 1 million bpd of Iranian oil exports from the market.
The potential threat of supply disruptions in the region has prompted analysts to raise their forecast on oil prices for the quarter. Analysts at Bank of America (NYSE:BAC) forecast Brent to average $54 this quarter.