Oil prices jump 2% on lower Iraq, Saudi exports

NEW YORK — Oil prices climbed about 2% to a fourmonth high on Monday on lower crude exports from Iraq and Saudi Arabia and signs of stronger demand and economic growth in China and the US.

Brent futures rose $1.55 or 1.8% to settle at $86.89 a barrel, while US West Texas Intermediate (WTI) crude rose $1.68 or 2.1% to settle at $82.72.

That pushed both benchmarks into technically overbought territory with Brent closing at its highest since Oct. 31 and WTI closing at its highest since Oct. 27.

In other energy markets, US gasoline futures RBc1 closed at their highest since Aug. 31.

On the supply side, Iraq, the Organization of the Petroleum Exporting Countries’ (OPEC) second-largest producer, said it would reduce crude exports to 3.3 million barrels per day (bpd) in coming months to compensate for exceeding its OPEC+ quota since January, a pledge that would cut shipments by 130,000 bpd from last month.

In January and February, Iraq pumped significantly more oil than an output target established in January when several members of the OPEC and allies like Russia, a group known as OPEC+, agreed to support the market.

In Saudi Arabia, OPEC’s largest producer, crude exports fell for a second straight month, down to 6.297 million bpd in January from 6.308 million bpd in December.

In Russia, meanwhile, Ukrainian attacks on energy infrastructure have idled around 7% of refining capacity in the first quarter, according to a Reuters analysis.

Market participants said refinery outages will push Russia to increase oil exports through its western ports in March by almost 200,000 bpd to around 2.15 million bpd.

In the US, meanwhile, oil output from top shale-producing regions will rise in April to the highest level in four months, according to a federal energy outlook.

In China, the world’s biggest oil importer, factory output and retail sales beat expectations in the January-February period, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence. —