Crude oil rose by $1 on Thursday amid supply fears after drones struck Iraq’s oil fields for a fourth day, pointing to continued risk in the Middle East region.
Brent crude futures settled at $69.52 a barrel after chalking up $1.00 or 1.46 per cent, while the US West Texas Intermediate (WTI) crude futures finished at $67.54 a barrel, up $1.16 or 1.75 per cent.
Oil output in the semi-autonomous Kurdistan region has been slashed by between 140,000 and 150,000 barrels per day. This is more than half the region’s normal output of about 280,000 barrels per day.
From Monday to early Wednesday, explosive-laden drones struck the Tawke and Peshkabir fields operated by DNO ASA, along with Dohuk. There was a separate strike set fire to the Sarsang field run by HKN Energy, prompting a region-wide shutdown.
Iran-backed militias have been alleged as the likely source of attacks this week on the oilfields in Iraqi Kurdistan, although no group has claimed responsibility.
Also, Iraqi Kurdistan will resume oil exports through a pipeline to Turkey after a two-year halt, Iraq’s federal government said on Thursday despite a fourth day of drone attacks that have shut down half of the region’s output.
Both governments have been in negotiations since late February to end a stand-off that has halted flows from the north of the country to Turkey’s Mediterranean port of Ceyhan.
Markets have also been jittery while waiting for the imposition of tariffs by US President Donald Trump, which could shift oil supplies from the United States to India and China.
The American President said letters notifying smaller countries of their US tariff rates would go out soon. He has also alluded to prospects of a deal with China on illicit drugs and a possible agreement with the European Union.
On Wednesday, the U.S. Energy Information Administration (EIA) reported that crude oil inventories in the US decreased by 3.9 million barrels during the week ending July 11.
Last week, the International Energy Agency (IEA) said that oil output increases were not leading to higher inventories, which showed markets were thirsty for more oil.