Oil edges up on Iraq tensions

new york — Oil prices were up slightly on Friday in see-saw trade, ending the week up on support from a sharp decline in Iraqi crude exports due to tensions in the Kurdistan region after contending with weak demand data.

US crude futures settled up 18 cents, or 0.4 per cent, at $51.47 a barrel. Brent crude rose 52 cents, or 0.9 per cent, at $57.75 a barrel. Both contracts were up slightly for the week.

“We’ve continued to see signs that the market needs a steady drumbeat of positive information,” said Gene McGillian, director of market research for Tradition Energy. “This week’s DoE report where gasoline demand dropped to its lowest since March gave a little pause to that.”

Oil exports from Iraq’s Kurdistan via the Turkish port of Ceyhan were flowing at average rates of 216,000bpd, down from the usual flows of around 600,000 bpd, a shipping source said.

Russia’s biggest oil company, Rosneft, has agreed to take control of Iraqi Kurdistan’s main oil pipeline in a $1.8 billion investment.

Olivier Jakob, chief strategist at consultancy Petromatrix, said the deal with Rosneft “makes it a bit harder for Baghdad to do anything against those flows”.

Analysts said the market was on a path toward rebalancing.

“The oil market has moved into modest undersupply and we expect this will persist at least through the end of the year,” US investment bank Jefferies said.

US commercial stocks of crude oil have dropped 15 per cent from their March records, to 456.5 million barrels, below levels seen last year. Part of this drawdown has been due to rising exports. — Reuters