LONDON: Oil prices rose on Thursday as a surprise drop in US crude stockpiles and a halt to exports from Iraq’s Kurdistan region offset a smaller than expected cut to Russian supplies.
Brent crude futures rose 57 cents, or 0.73 percent, to $78.85 a barrel by 1327 GMT, while West Texas Intermediate crude rose 82 cents, or 1.12 percent, to $73.79.
US crude oil stockpiles fell unexpectedly in the week to March 24 to a two-year low, the Energy Information Administration said on Wednesday.
Crude inventories dropped by 7.5 million barrels, compared with expectations for a rise of 100,000 barrels in a Reuters poll of analysts.
The continuing halt to exports from Iraq’s northern region provided further support.
Producers have shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq after the northern export pipeline was shut, with more outages on the horizon, company statements showed.
But the Kurdistan-Iraq premium in oil prices could vanish sooner than expected, Citi analysts said Thursday.
The “changes in Iraq’s domestic politics may lead to a durable political settlement very soon,” Citi said, estimating that pipeline flows could increase by 200,000 barrels per day (bpd).
These factors offset bearish sentiment after a lower than expected cut to Russian crude oil production in the first three weeks of March.
The 300,000 bpd production decline compared with targeted cuts of 500,000 bpd, or about 5 percent of Russian output, sources familiar with the data told Reuters.
Markets are now waiting for US spending and inflation data due on Friday and the resulting impact on the value of the US dollar.
Meanwhile, OPEC+ is likely to stick to its existing deal on reduced oil output at a meeting on Monday, five delegates from the producer group told Reuters.
“While we think oil prices may remain volatile in the near term, we still expect rising Chinese crude imports and lower Russian production to lift prices over the coming quarters,” UBS said on Thursday.
China’s refined fuel consumption this year is likely to grow 3 percent from 2019 pre-COVID levels, state energy giant PetroChina said on Thursday.
“If all goes as expected, and we manage to avoid a recession, oil prices will dance around $75-$85/bbl in the coming months,” FGE analysts said in a note.
Oil rises on US crude draw and Iraqi supply risks
https://arab.news/vd96m
Oil rises on US crude draw and Iraqi supply risks
- US crude oil stockpiles fell unexpectedly in the week to March 24 to a two-year low
- Crude inventories dropped by 7.5 million barrels, compared with expectations for a rise of 100,000 barrels in a Reuters poll of analysts
Global trade isn’t deglobalizing — it’s reshuffling, Harvard economist says
ALULA: Global trade is not retreating into deglobalization despite geopolitical shocks, but is instead undergoing a structural reshuffling led by US-China tensions, according to Harvard University economist Pol Antras.
Presenting research at the AlUla Emerging Market Economies Conference, Antras said there is no evidence that countries are systematically turning inward. Instead, trade flows are being redirected across markets, creating winners and losers depending on export structure and exposure to Chinese competition.
This comes as debate intensifies over whether supply-chain disruptions, industrial policy and rising trade barriers signal the end of globalization after decades of expansion.
Speaking to Arab News on the sidelines of the event, Antras said: “I think the right way to view it is more a reorganization, where things are moving from some countries to others rather than a general trend where countries are becoming more inward looking, in a sense of producers selling more of their stuff domestically than internationally, or consumers buying more domestic products than foreign products.”
He said a change of that scale has not yet happened, which is important to recognize when navigating the reshuffling — a shift his research shows is driven by Chinese producers redirecting sales away from the US toward other economies.
He added that countries are affected differently, but highlighted that the Kingdom’s position is relatively positive, stating: “In the case of Saudi Arabia, for instance, its export structure, what it exports, is very different than what China exports, so in that sense it’s better positioned so suffer less negative consequences of recent events.”
He went on to say that economies likely to be more negatively impacted than the Kingdom would be those with more producers in sectors exposed to Chinese competition. He added that while many countries may feel inclined to follow the United States’ footsteps by implementing their own tariffs, he would advise against such a move.
Instead, he pointed to supporting producers facing the shock as a better way to protect and prepare economies, describing it as a key step toward building resilience — a view Professor Antras underscored as fundamental.
Elaborating on the Kingdom’s position amid rising tensions and structural reorganization, he said Saudi Arabia holds a relative advantage in its economic framework.
“Saudi Arabia should not be too worried about facing increased competitive pressures in selling its exports to other markets, by its nature. On the other hand, there is a benefit of the current situation, which is when Chinese producers find it hard to sell in US market, they naturally pivot to other markets.”
He said that pivot could benefit importing economies, including Saudi Arabia, by lowering Chinese export prices. The shift could increase the Kingdom’s import volumes from China while easing cost pressures for domestic producers.
