Sources in the "OPEC": a trend to extend the production cut 9 months
Riyadh - Baghdad / Reuters
Oil prices rose on Wednesday, supported by a drop in US crude stocks and concerns that tensions in the Middle East could disrupt supplies.
US benchmark Brent crude for July delivery rose 28 cents to $ 58.16 a barrel, up 0.5 percent from the last settlement and a third higher than mid-year levels. US West Texas Intermediate crude futures rose 15 cents, or 0.3 percent, to $ 52.03 a barrel, up nearly a quarter from mid-June.
Trading volumes were limited in Asian trading today due to public holidays in Singapore, Malaysia and parts of India.
Traders said prices rose with support from a drop in US crude inventories, as well as fears that fighting in Iraq and escalating tension between the United States and Iran could affect supplies.
US crude inventories fell from 7.1 million barrels in the week ending October 13 to 4.614 million barrels, the US Petroleum Institute said on Tuesday.
Iraq's oil minister, Jabbar al-Luaibi, said the government would contract with a foreign company to double oil production from Kirkuk to more than 1 million bpd, after Baghdad's control of the province and the restoration of oil fields, which was run by the Kurds.
The oil company controls the Iraqi government originally on the southern part of the Kirkuk field and the fields of Jampur and Kebaz in the province, which was disputed between Baghdad and Erbil.
At best, the Kurdistan region receives 350,000 barrels per day from the Kirkuk fields, which are now all under the control of the Iraqi government. Some observers fear that a doubling of Iraqi production from Kirkuk could affect Iraq's commitment to OPEC's agreement to cut output, with its current production of more than 4 million bpd. An increase of about half a million barrels per day from one producer country would undermine the efforts of the rest of the producers, who seek to maintain a market balance to keep oil prices above $ 50 a barrel.
OPEC is holding a meeting in the last week of next month to discuss a production control agreement and its possible extension with non-OPEC producers such as Russia. OPEC's chief executive said on Wednesday OPEC and major oil producers were likely to expand production cuts at a time when Russia and Saudi Arabia agreed to support the market.
"Saudi Arabia and Russia have already adopted this strategy to support the market," Chief Executive Patrick Boyan told reporters on the sidelines of an oil and finance conference.
He said that the recent visit by King Salman to Moscow "is a clear indication of the interest of both countries in supporting the market ... I will not be surprised by the extension."
OPEC and a number of oil producers outside it agreed late last year to cut production for six months from January in a bid to dispose of the global supply stigma, and the agreement was extended until 2018.