OPEC & Political Tensions Drive Oil Higher

Kurdistan has pleaded with Iraqi officials to halt its military operations in return for a suspension of its independence agenda.

Early Wednesday, the Kurdish government issued the statement in an effort to remedy the conflict that has plagued the region in the wake of the vote for independence.

Iraqi forces have seized the Kurdish-controlled Turkey boarders and the oil pipeline which funnels Kurdish oil to be exported. The conflict has wreaked havoc on the Kurdish economy.

The capture of Kurdish oilfields has set the region back by more than 50% of revenue the economy desperately needs.

The conflict has supported oil prices, as investors price in the supply delays.

Meanwhile, US industry data indicated a decline in gasoline inventories. Brent oil, the international benchmark is holding above $58.20, while the US benchmark, crude oil, has managed to trade above the $52 mark. Both levels are key psychological points in which oil has previously struggled to maintain.

Motor fuel inventories declined by 5.75 million barrels per week, according to the American Petroleum Institute. Tomorrow’s gasoline stockpiles are expected to show an increase of 10 billion barrels from the previous week.

OPEC are negotiating an extension of production cuts while also turning its attention to an exit strategy to reassure investors that when cuts to supply end OPEC won’t flood the market with oil.

OPEC and its allies will meet on the 30th of November and are rumoured to increase the scope of production cuts until the end of 2018.

The cartel, which together with its allies, control over half of the world’s oil supply, are trying to curtail the supply glut and push oil to the $60 mark.

Crude oil stockpiles, which will be released later today, are expected to show a 3 million reduction when compared to the previous week, this would be the fifth week the commodity’s inventories declined.