Oil prices dip as Kurdish crude exports resume and OPEC+ eyes output hike
SINGAPORE: Oil prices slipped nearly 1 percent on Monday after Iraq’s Kurdistan region resumed crude exports to Turkey and reports suggested that OPEC+ is preparing for another production increase in November, raising concerns about swelling global supplies.
Brent crude futures fell 63 cents, or 0.90 percent, to $69.50 a barrel by 0023 GMT, giving back some of Friday’s gains when prices closed at their highest since July 31. US West Texas Intermediate (WTI) crude dropped 65 cents, or 0.99 percent, to $65.07 a barrel.
Market caught between tight supply and output worries
Traders say prices are being pulled in two directions. “Ongoing fears of production increase are limiting gains, but a tight near-term outlook has crude prices in a vice as the trading week begins,” said Michael McCarthy, chief executive of investor platform Moomoo Australia and New Zealand.
The immediate pressure on prices came after Iraq’s oil ministry confirmed that crude shipments from the Kurdistan region restarted on Saturday. The flow through the pipeline to Turkey’s Ceyhan port had been halted for more than two and a half years due to political and contractual disputes.
Under an interim agreement reached last week, the federal government in Baghdad, the Kurdistan regional government (KRG) and foreign oil producers will allow 180,000 to 190,000 barrels per day (bpd) of exports. Iraq’s oil minister told Kurdish broadcaster Rudaw that volumes could eventually reach 230,000 bpd. The United States had lobbied for the restart, seeing it as a step towards easing supply tensions.
OPEC+ to decide on fresh hike
Meanwhile, attention is turning to OPEC and its allies, collectively known as OPEC+. The group is expected to approve another output hike of at least 137,000 bpd when it meets on Sunday, according to three sources familiar with the discussions. Rising oil prices have encouraged the bloc to push for higher production in a bid to recapture market share.
However, analysts note that despite these plans, OPEC+ has been underproducing compared to its official targets by nearly half a million bpd, suggesting the feared supply glut may not materialise as quickly as markets expect.
With fresh Kurdish oil hitting the market and another OPEC+ increase on the horizon, traders are watching closely to see whether the balance tips towards lower prices in the weeks ahead.
