LONDON: Oil prices rose on Monday after a halt to oil exports from Iraqi Kurdistan via Turkey and moves to contain a potential banking crisis that could have hit demand for crude.
Brent crude futures were up $1.18, or 1.6%, at $76.17 a barrel by 1426 GMT. West Texas Intermediate U.S. crude rose $1.28, or 1.9%, to $70.54.
Brent gained 2.8% last week while WTI rebounded by 3.8% as jitters in the banking sector eased.
Oil settles down on worries over banks, US crude reserve
About half a percent of global oil supply, or 450,000 barrels per day (bpd), of crude exports from Kurdistan stopped on Saturday after a victory in an arbitration case confirmed Baghdad’s consent was needed to ship the oil from Turkey.
“Near-term oil prices are likely to remain volatile, influenced by the current financial market turmoil, but we retain a positive outlook,” said UBS analyst Giovanni Staunovo.
“We continue to expect rising Chinese crude imports and demand, plus lower Russian production, to tighten up the oil market and lift prices over the coming quarters.”
First Citizens BancShares Inc said it will acquire the deposits and loans of failed Silicon Valley Bank, closing one chapter in the crisis of confidence that has ripped through financial markets.
There are also hopes for extra support for bank funding after reports that U.S. authorities were in early deliberations about expanding emergency lending facilities.
Oil prices also drew support from Russian President Vladimir Putin’s plans to station tactical nuclear weapons in Belarus.
The move is one of Russia’s most pronounced nuclear signals yet and a warning to NATO over its military support for Ukraine, which has called for a meeting of the U.N. Security Council in response. NATO slammed Putin for what it called his “dangerous and irresponsible” nuclear rhetoric.
Russia’s Deputy Prime Minister Alexander Novak has said that Moscow is close to achieving its target of cutting crude output by 500,000 barrels per day (bpd) to about 9.5 million bpd.
But Russia’s crude exports are expected to remain steady as it cuts refinery output in April, data from industry sources and Reuters calculations showed on Friday.
Russia’s oil products exports have been hit harder than its crude exports by a recent European Union embargo, with tonnes of diesel stuck on ships awaiting buyers.
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