Iraq boosts crude output in Basra on Kirkuk slowdown
Iraq said it was increasing oil exports yesterday from the southern Basra region by 200,000 barrels per day (bpd) to make up for a shortfall from the northern Kirkuk fields.
The output from the northern Kirkuk region fell last week in the course of military operations to take it back from Kurdish fighters who have been there since 2014.
The increase in Basra exports keeps Iraq’s total output within the quota agreed with Opec, the oil ministry said citing the oil minister Jabbar Al Luaibi.
He said 200,000 bpd will be shipped from southern Basra export terminal on top of the usual volumes exported daily which exceed 3.2 milllion barrels, Reuters reported.
“These additional volumes will be produced until the northern oil output goes back to its previous level,” he said.
Iraq will not be able to restore Kirkuk’s oil output to the previous week’s levels before Sunday because of missing equipment at two of the largest fields of the region, Avana and Bai Hasan, an oil ministry official said on Thursday.
Until these shutdowns, the northern oil region exported about 530,000 bpd, of which about half came from the semi-autonomous Kurdistan region and the rest from the disputed Kirkuk province, claimed by both the Kurds and the Iraqi central authorities.
Kurdish Peshmerga forces deployed in Kirkuk in 2014, when the Iraqi army fled its positions in the face of an advance by Islamic State militants. The Kurdish move prevented the militants from taking control of its oilfields.
Oil prices have rebounded as a risk-on appetite is seen coming back into financial markets.
West Texas Intermediate futures closed 0.4 per cent higher in New York on Friday. In the US, oil rigs slid for a third week, according to Baker Hughes data. Meanwhile, supply from Kurdistan remains uncertain. WTI’s 50-day moving average rose above the 200-day one, a bullish signal know as a golden cross.
“The stock market is hitting new highs. The risk-on appetite is coming back,” said Michael Loewen, a commodities strategist at Scotiabank in Toronto. “The general rhetoric has been Opec is going to be extending their cuts. We’ve been seeing good demand in the US At the end of the day, the market is shaping up a lot more firmly than most were anticipating.”
WTI crude for November delivery rose 18 cents to settle at US$51.47 a barrel on the New York Mercantile Exchange.
Brent for December settlement climbed 52 cents to settle at $57.75 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $5.91 to December WTI.