Oil Slips 1 Percent as Extends Pullback from 2015 Peaks
NEW YORK, Sept 28 (Reuters) - Oil prices slipped on Thursday, further backing off from 2015 peaks hit earlier in the week as tension around northern Iraq following the Kurdistan region's vote in favor of independence spurred fresh supply concerns.
Crude has risen sharply in the last two-and-a-half weeks as traders anticipated renewed demand from U.S. refiners who were resuming operations after shutdowns due to Hurricane Harvey. Major world oil producers have also indicated that they will stick with output cuts to limit supply.
U.S. crude has gained 9 percent in 14 trading days, with Brent up 7 percent in that time. Both benchmarks are near overbought levels, based on an index of relative strength, which measures the speed and magnitude of price movements.
"We've made a really impressive run here and I do think we're due for a pullback," said Robert Yawger, director of energy futures at Mizuho in New York.
U.S. crude settled down 58 cents, or 1.1 percent, to $51.56 a barrel after reaching a five-month intraday high of $52.86.
Brent ended down 49 cents, or 0.9 percent, at $57.41 a barrel, after hitting a more than two-year high of $59.49 on Tuesday after Monday's referendum vote prompted Turkey to threaten to close the region's oil pipeline.
Iraqi Kurdistan voted overwhelmingly in favor of independence, prompting Turkish President Tayyip Erdogan to say he could use force to prevent the formation of an independent Kurdish state and might close the oil "tap".
"Kurdistan and northern Iraq now export 500,000-550,000 barrels per day (bpd). That would be a big loss to the market," said Tamas Varga, analyst at brokerage PVM Oil Associates.
Turkey promised on Thursday to deal only with the Iraqi government on crude, the office of Iraqi Prime Minister Haider al-Abadi said.
Brent's premium over U.S. crude <WTCLc1-LCOc1> widened to a more than two-year high this week, in part due to reduced demand stemming from Harvey.
Yawger noted that a sharp drawdown in U.S. distillate inventories - diesel and heating oil - ahead of the busy winter season should spur demand for crude in coming weeks, keeping any selloff modest.
"I tend to believe there's some good fundamentals here. The OPEC situation should keep Brent relatively elevated, and the distillate situation is so far behind the 8-ball that the margin is trading at $25," he said.
The heating oil crack spread <HOc1-CLc1>, a measure of the profit margin for refining crude into diesel or heating oil, fell to $24.97 on Thursday. Diesel inventories in the United States are currently seven percent below the seasonal average during this decade, according to the U.S. Energy Department.
(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and David Gregorio)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- McDermott Settles Reficar Dispute
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea