Oil Steady, Traders Weigh Supply Risks and Strong Dollar
World oil prices remained stable on Thursday (July 17), with Brent traded at around $68.47 per barrel. The reason? Market participants are balancing two main factors: disruptions to oil supplies from Iraq and a strengthening US dollar. A stronger dollar typically pressures commodity prices, but concerns about a potential global oil supply shortfall are keeping prices firm.
Geopolitically, drone attacks in Iraq's Kurdistan region have disrupted production by around 200,000 barrels per day. These attacks continued through Thursday, according to local authorities. However, their impact on global markets has been limited because the region has not exported crude oil since a major export pipeline was shut down two years ago.
Meanwhile, oil stocks at the Cushing oil storage hub in the US increased, but levels remain low compared to seasonal averages. This reinforces concerns about short-term supply. Goldman Sachs' head of oil research, Daan Struyven, said the market is now more focused on "supply downside risks" than the global glut.
Supply concerns are also evident in the deteriorating oil price structure, with short-term delivery prices being more expensive than long-term contracts. In the US, the spread between low-sulfur gasoil and Brent for the September contract increased 7% this month, reflecting the potential for greater profits from diesel production. Meanwhile, WTI for August delivery edged up 0.23% to $66.53 per barrel.
Source: (ayu-newsmaker)
