FX.co ★ Oil Rises as Supply Concerns Mount

On Wednesday, the West Texas Intermediate (WTI) crude oil futures climbed to $64.6 per barrel, building upon a 1.8% increase observed in the previous session. This upward movement was fueled by a decline in US crude inventories, heightening worries over limited supply. The Energy Information Administration (EIA) reported a reduction in US crude oil inventories by 0.607 million barrels, counter to market predictions of a rise. The situation was further compounded by stalled negotiations to resume oil exports from Iraq's Kurdistan region, as two leading producers insisted on debt repayment assurances, ultimately halting pipeline deliveries to Turkey since March 2023. Prices also found support amidst geopolitical tensions, with NATO promising a "robust" response to Russian airspace violations, alongside Ukrainian drone strikes aimed at Russian refineries and pipelines. Furthermore, Chevron's operations faced restrictions, exporting only about half of the 240,000 barrels per day produced in collaboration with partners in Venezuela. This follows the July introduction of a new US mandate that, while greenlighting activity in the sanctioned nation, limits the export of its heavy crude to the United States.