Oil Rises as Exports and Banking Fears Decrease

Oil clung to gains as a disagreement between Iraq and Kurdish officials curtailed exports and fears of a banking meltdown receded.

West Texas Intermediate edged forward Tuesday and has recovered almost 10% since dropping to a 15-month low in the immediate aftermath of the banking crisis. A legal dispute between Iraq, Kurdistan, and Turkey has halted around 400,000 barrels a day of flows, constricting global supplies.

The market shrugged off concerns of a buildup of crude vessels along the coast of France as widespread strikes there forced most of the nation’s fuelmakers to halt operations. Strong Asian demand for the barrels has prevented prices from sliding.

While oil has rallied from recent lows as the banking sector stabilizes, it remains on track for a fifth monthly decline amid concerns over a potential US recession and resilient Russian energy flows. Most market watchers are still betting that China’s recovery will accelerate and boost prices later this year as demand rebounds.

Meanwhile, OPEC+ is showing no signs of adjusting oil production when it meets next week, staying the course amid turbulence in financial markets, delegates said.  

Investors will also be watching comments from several US Federal Reserve officials, as well as a key measure of US inflation due this week, for clues on the path forward for monetary policy. Interest-rate hikes have added to bearish sentiment.

Prices:

• WTI for May rose 39 cents to settle at $73.20 a barrel in New York.
• Brent for May settlement rose 53 cents to settle at $78.65 a barrel.