Picture: SUPPLIED
Picture: SUPPLIED

Tokyo — Oil prices inched up on Tuesday, getting support from a decline in oil exports from Opec’s second-biggest producer, Iraq, and from a projected extended fall in US commercial oil stocks.

The Organisation of the Petroleum Exporting Countries (Opec) also announced record compliance with an agreement between Opec and non-Opec producers to cut output.

London Brent crude for December delivery was up 5c at $57.42 a barrel by 2.58am GMT after settling 38c lower on Monday.

US crude for December delivery was up 5c at $51.95.

Iraqi oil exports have fallen by more than 200,000 barrels a day so far this month, as shipments from both the north and south of the country declined.

Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo, said the market was focusing more on supportive factors, "such as the Kurdistan situation, the slowdown in shale-related (US) rig counts and the possible extension in Opec (output) cuts."

Crude oil exports through the Iraqi Kurdistan-controlled pipeline to the Turkish port of Ceyhan rose 13% to 288,000 barrels a day on Monday afternoon, but that was still less than half normal levels due to tension in the region, a shipping source told Reuters.

Iraq could still boost southern exports throughout the rest of October and plans to do so. Iraqi Oil Minister Jabar al-Luaibi said on Saturday southern exports were increasing by 200,000 barrels a day to make up for the northern shortfall.

US Secretary of State Rex Tillerson urged the Iraqi government and the Kurdistan region on Monday to resolve their conflict over Kurdish self-determination and disputed territories through dialogue.

Compliance

The drop in supplies from Iraq comes as the Organisation of the Petroleum Exporting Countries, Russia and other producers are cutting output by about 1.8-million barrels a day until March 2018 in an effort to drain a glut and support prices.

In September Opec and non-Opec countries achieved the highest compliance on planned cuts since the deal kicked off in January — at a rate of 120% — helping reduce oil stocks further at Organisation for Economic Co-operation and Development (OECD) nations, Opec said.

Meanwhile, US crude inventories are expected to have fallen by 2.5-million barrels last week, while petrol and distillate stockpiles each probably fell by at least 1.5-million barrels, a preliminary Reuters poll showed on Monday, ahead of data by the Industry group the American Petroleum Institute later on Tuesday.

The US oil rig count fell by seven to 736 in the week to October 20, the lowest level since June, Baker Hughes data showed on Friday.

Reuters

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