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Crude oil prices rose in Asian trading on Wednesday, extending gains to a third straight session as disruptions in crude oil shipments in Kurdistan and a major drawdown in U.S. inventories could point to tighter supplies in the near term.
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Crude oil prices also found support from improving sentiment toward the banking sector, as a series of regulatory assurances eased fears of an imminent crisis. Data from the API showed that U.S. crude inventories unexpectedly fell by nearly 6.1 million barrels in the week to March 24, the sharpest decline since mid-2022. The reading usually signals a similar trend from government data due later in the day, and is expected to show a negligible increase in inventories this week. Brent crude futures rose about 0.2% to $73.79 a barrel by 01:02 GMT. Both contracts had been set for a third straight session of gains, after recovering from 15-month lows hit last week. Oil prices have made a strong start to the week after Iraq halted exports of 450,000 barrels per day, roughly 0.5% of global daily oil supplies. From the Kurdistan region via Turkey after arbitration showed Baghdad’s approval was needed to ship oil. Analysts said further disruptions to Kurdish supplies could support oil prices this year, with Barclays suggesting a $3 increase in year-end prices. Easing concerns over the banking crisis have also helped oil prices this week, as traders are less concerned about a recession that is expected to dent oil demand this year. On the other hand, strikes in France and Germany brought economic activity to a standstill in both countries this week, suggesting some short-term weakness for oil demand. French refineries were operating slowly, while German air travel and public transport were disrupted. The oil market is now awaiting Chinese business activity data due this week, to gauge the state of the economic recovery in the world’s largest crude importer. But again, analysts expect economic growth to be softer in March than last month, as the economy rebounds after Covid-19 began to ease. China is still struggling with weak domestic and foreign demand amid worsening economic conditions.
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