Oil prices rose on Monday following fresh worries about supply, with Brent crude futures growing by $3.13 or 4.2 per cent to $78.12 a barrel, while the US West Texas Intermediate (WTI) crude appreciated by $3.55 or 5.1 per cent to $72.81 per barrel.
Prices gained support as a halt to some exports from Iraq’s Kurdistan region added to worries about oil supplies.
Turkey stopped pumping crude from Kurdistan via a pipeline following a court decision that confirmed that Iraq’s consent was needed to ship the oil.
The exports amount to about half a per cent of the global oil supply or 450,000 barrels per day.
Analysts noted that the loss of oil supplies from Kurdistan could offset the impact of Russian production and supplies finding their way to the market.
This development coincided with eased worries that financial turmoil could hurt the economy and curtail fuel demand after a series of US banking acquisitions.
The easing of concerns follows an announcement by First Citizens that it would acquire deposits and loans from failed Silicon Valley Bank (SVB) to stabilize markets.
The deal comes after the Federal Deposit Insurance Corporation (FDIC) took over Silicon Valley Bank on March 10 after depositors rushed to pull out their money in a bank run that also brought down Signature Bank.
First Citizens will not pay cash upfront for the deal. Instead, it said it granted equity appreciation rights in its stock to the FDIC that could be worth up to $500 million, lesser than what Silicon Valley Bank was worth before it failed.
Prices also drew support from worries of geopolitical turmoil after Russian President Vladimir Putin’s plans to station tactical nuclear weapons in Belarus.
The United States – the world’s other nuclear superpower – has reacted cautiously to Mr Putin’s statement, saying there were no signs the country planned to use its nuclear weapons.
Meanwhile, Russian Deputy Prime Minister, Mr Alexander Novak, has said the country is close to achieving its target of cutting crude output by 500,000 barrels per day to about 9.5 million barrels per day.
CREDIT: Business Post
