Oil markets were largely flat on Wednesday as data indicated a decline in U.S. crude inventories last week, reinforcing expectations of tightening supplies.
Brent crude futures rose slightly by 3 cents to $67.66 per barrel by 06:30 GMT, while U.S. West Texas Intermediate (WTI) futures edged up 5 cents to $63.46. Both benchmarks had advanced over $1 a barrel on Tuesday after efforts to resume exports from Iraq’s Kurdistan stalled. Pipeline shipments to Turkey remain suspended despite attempts to finalize an agreement, as two major producers requested guarantees for debt repayment.
The agreement between Iraq’s federal authorities, the Kurdish regional government, and oil companies would allow approximately 230,000 barrels per day to flow once more. Pipeline operations have been halted since March 2023.
“Prices are expected to remain supported but range-bound in the near term,” said Emril Jamil, a senior analyst for oil at the LSEG.
Jamil added that ongoing supply disruptions from Russia are providing a floor for oil prices, but further gains are limited by uncertainty surrounding U.S. Federal Reserve interest rate moves.
According to American Petroleum Institute (API) data, U.S. crude and gasoline stocks fell last week, while distillate inventories increased. Crude supplies dropped by 3.82 million barrels in the week ending September 19, gasoline inventories declined by 1.05 million barrels, and distillates rose by 518,000 barrels, according to sources familiar with the data.
Official U.S. government energy statistics are due later Wednesday, expected to show increases in both crude and gasoline stocks, with a likely reduction in distillates.
Other supply constraints are also emerging. Reuters reported that Chevron will be able to export only about half of the 240,000 barrels per day of crude it produces in partnership with Venezuela.
Although Chevron received authorization to operate in the sanctioned country in July, new regulations will reduce the volume of Venezuela’s heavy, high-sulfur crude reaching U.S. markets.
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