© Reuters. FILE PHOTO: A tug boat pushes an oil barge through New York Harbor near the Statue of Liberty in New York City, US, May 24, 2022. Reuters / Brendan McDiarmid

by Jesslyn Lerah

SINGAPORE (Reuters) – Oil was nearly steady on Thursday as a surprise drop in stockpiles offset a smaller-than-expected cut in Russian supplies, while investors closely watched developments on Iraqi Kurdistan oil exports.

Futures fell 5 cents, or 0.1%, to $78.23 a barrel by 0630 GMT, while West Texas Intermediate crude rose 12 cents, or 0.2%, to $73.09 a barrel.

Company statements show producers have shut or reduced output at several oil fields in northern Iraq’s semi-autonomous Kurdistan region after a northern export pipeline was halted.

But the Kurdistan-Iraq premium in oil prices may disappear sooner than expected, Citi analysts said on Thursday.

“Changes in Iraq’s domestic politics could lead to a durable political settlement very soon”, Citi said, estimating that pipeline flows could increase by about 200,000 barrels per day (bpd).

Meanwhile, an unexpected drop in US crude stockpiles weighed on prices, with imports falling to a two-year low, according to the US Energy Information Administration.

Crude stockpiles fell 7.5 million barrels to 473.7 million barrels in the week ended March 24, while analysts’ expectations in a Reuters poll were for a rise of 100,000 barrels.

However, gasoline stocks fell 2.9 million barrels to 226.7 million barrels, compared with analysts’ expectation of a decline of 1.6 million barrels.

“Seasonal strength in demand is expected to propel (oil) prices above current levels by the end of the second quarter,” said analysts at National Australia Bank (OTC: ) .

Oil prices softened slightly on Thursday, but remained within the trading band seen since the beginning of 2023, analysts said.

Meanwhile, a below-target cut in Russian crude output fueled supply concerns.

Russian crude output fell by nearly 300,000 bpd in the first three weeks of March, well short of a targeted cut of 500,000 bpd, sources familiar with the data told Reuters.

Source: www.investing.com