Brent softens after supply glut concerns offset geopolitical tailwinds
The front-month ICE Brent contract has inched lower by $0.12/bbl on the day from Friday, to trade at $69.44/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent's price reached a multi-week high on Friday after the renewed conflict between Russia and Ukraine added upward pressure.
US President Donald Trump has urged Turkey to suspend its Russian oil imports, according to the Atlantic Council.
The International Energy Agency (IEA) said OPEC+’s actual supply boost in October will likely fall short of its target in its September report, noting that members, including Iraq, the UAE, Kuwait and Kazakhstan, are pumping a combined 1.1 million b/d above their quotas.
The IEA also cited tanker-tracking data showing that most of OPEC’s additional September volumes were absorbed by regional refineries and power generation rather than exported.
If sustained, this trend could point to tighter export availability from Saudi and other Middle East OPEC members in the coming months.
Downward pressure:
The OPEC+ bloc is expected to raise output by at least 137,000 b/d in November at its online meeting on 5 October, three sources have told Reuters.
Iraq’s Kurdistan region has resumed crude exports to Turkey after more than two years, Turkish oil minister Alparslan Bayraktar said in a social media post. The halt had previously curbed around 400,000 b/d of supply from northern Iraq and the restart adds to concerns of a supply glut.
The agreement will initially allow 190,000 b/d of crude oil to flow to Turkey's Ceyhan port, Iraq's oil minister, Hayyan Abdul Ghani told Kurdish broadcaster Rudaw.
Oil producers including Norway’s DNO, Gulf Keystone Petroleum and HKN Energy have confirmed plans to restart output, but said full resumption will depend on further government guidance.
DNO will resume 38,000 b/d from its Tawke field. Gulf Keystone will restart production from its Shaikan field but has not yet confirmed the capacity.
By Konica Bhatt
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