Brent crude oil edged lower by 8 cents to settle at $84.38 per barrel in the early hours of Tuesday while the U.S. West Texas Intermediate crude oil shed 7 cents to $80.65 per barrel.
Market analysts from ANZ Bank, Brian Martin, and Daniel Hynes, in a conversation with Reuters, observed that “Crude oil faced challenges in maintaining its upward momentum, with indications of supply tightness showing signs of easing.”
In an exclusive report from Reuters, it was revealed that Hayan Abdel-Ghani, Iraq’s Minister of Oil, arrived in Ankara, Turkey’s capital, to engage in discussions on a range of issues, including the potential resumption of oil exports via the Ceyhan oil terminal.
This information was relayed by a source within the minister’s office on Monday. Notably, Turkey suspended Iraq’s exports of 450,000 barrels per day (bpd) through the northern Iraq-Turkey pipeline on March 25, following an arbitration decision by the International Chamber of Commerce (ICC).
The reintroduction of additional Iraqi crude oil into the market could serve as a critical factor in alleviating the supply constraints that have particularly impacted crude oil. This is especially significant in light of the sustained and intensified production cuts implemented by the Organization of the Petroleum Exporting Countries and its allies (OPEC+).
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At the same time, apprehensions continue regarding the weakening Chinese economy, which stands as the world’s second-largest oil consumer. The market was disappointed by the People’s Bank of China’s moderate one-year lending rate cut, sparking concerns about global fuel demand.
Reuters highlighted a report by J.P. Morgan analysts that identified a deceleration in global demand growth for mobility fuels, with China’s base effect no longer being factored into the numerical analysis.
On the supply front, Iraq’s oil minister’s presence in Ankara for discussions on the potential resumption of oil exports through the Ceyhan oil terminal is a development that could mitigate the supply challenges arising from OPEC+ production cuts.
Despite these influencing factors, projections suggest that U.S. crude oil and gasoline inventories are poised to display declines, which could lend some support to oil prices.
