Oil prices continue to rise – now because of drone attacks on Iraqi fields
18 July 09:20
Oil prices continued to rise on Friday. This time, it was driven by drone attacks on Iraqi fields, "Komersant Ukrainian" reports citing Reuters.
Brent crude futures rose 29 cents, or 0.40%, to $69.81 per barrel as of 06:51 GMT. Futures for US West Texas Intermediate crude rose 27 cents, or 0.42%, to $67.81 per barrel.
Drones in Kurdistan
Four days of drone attacks on oil fields in Iraqi Kurdistan, which have halted half of the region’s production, supported prices, pushing both contracts up by $1 on Thursday.
Oil production in the semi-autonomous region of Kurdistan has dropped from about 280,000 barrels per day to 140-150,000 barrels per day, two energy officials said.
Despite the attacks, the Iraqi federal government said on Thursday that Iraqi Kurdistan would resume oil exports through a pipeline to Turkey after a two-year hiatus.
Officials pointed to Iranian-backed militias as the likely source of the attacks, although no group has claimed responsibility.
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Fuel demand
In addition, the market is supported by seasonal travel demand. In the first two weeks of July, global oil demand averaged 105.2 million barrels per day, up 600,000 barrels per day from a year ago and generally in line with forecasts, JPMorgan analysts said in a research note.
“Crude oil prices remained relatively stable this week, with little movement as the impact of OPEC supply increases was offset by strong seasonal demand in the US,”
– said LSEG analyst Anh Pham.
U.S. crude oil inventories fell more than expected last week due to rising exports, government data showed on Wednesday.
Demand in Asia also strengthened as refineries resumed operations after scheduled maintenance amid peak seasonal demand.
Short-term oil market fundamentals are likely to remain supportive, with the market remaining fairly tight during this quarter before becoming better supported in the last three months of the year, ING analysts said in a note on Friday.
However, uncertainty over the US tariff policy, which does not appear to be resolved by August 1, is weighing on the market. Plans by major oil-producing countries to lift production cuts will also add to supply after the end of seasonal summer demand in the Northern Hemisphere. Both Brent and WTI fell by more than 1% this week.
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