Crude oil prices increased slightly on Monday as the global market reacted to the possibility of Iraq resuming oil exports from its Kurdistan region. Last week, oil prices faced downward pressure, but they still managed to post a small gain. According to a report from ING, Brent crude oil prices rose by 0.11% over the week......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
On Monday, data showed that Brent crude oil, a key benchmark for global oil prices, had increased by 0.2%, trading at $74.54 per barrel. Meanwhile, the U.S. benchmark, West Texas Intermediate (WTI), edged up by 0.1%, reaching $70.67 per barrel from its previous closing price of $70.56.
Possible Restart of Iraq’s Kurdistan Oil Exports
The oil market is expected to experience fluctuations in the coming weeks, particularly due to expectations that Iraq could resume oil exports from its Kurdistan region as early as March. If this happens, about 300,000 barrels per day could be exported through the Ceyhan pipeline.
According to analysts at ING, oil flows from the Kurdistan region were halted in early 2023 due to a payment dispute between Iraq and Turkey. However, this is not the first time there have been discussions about resuming exports. If these exports resume, it could complicate Iraq’s compliance with the production limits set by OPEC+, the group of oil-producing countries that regulate output to maintain stable oil prices.
Interest Rate Cuts and Their Effect on Oil Prices
In another development, financial experts predict that the U.S. Federal Reserve (the Fed) may cut interest rates twice this year. Lower interest rates usually weaken the U.S. dollar, which can push oil prices higher. A weaker dollar makes oil cheaper for buyers using other currencies, increasing demand.
Additionally, lower interest rates encourage economic growth, which could lead to higher oil consumption in industries such as manufacturing and transportation.
Trade War Concerns and Market Reactions
There is also growing concern over global trade policies. Last week, former U.S. President Donald Trump instructed his trade and economic team to develop “reciprocal tariffs” targeting countries that impose tariffs on American goods. This move raises the risk of a global trade war.
If countries impose more tariffs on each other’s goods, it could make products more expensive, slow down trade, and potentially increase inflation. Higher inflation could indirectly push oil prices higher as production costs increase worldwide.
Russia-Ukraine Peace Talks and Their Impact on Oil Prices
At the same time, there are signs that peace talks between Russia and Ukraine could take place soon. Reports from a Russian newspaper suggest that the U.S. and Russia will meet on Tuesday in Saudi Arabia to discuss the situation. However, Ukrainian officials were not invited to these talks.
According to reports, Russia’s Foreign Minister Sergey Lavrov will lead his country’s delegation, while U.S. Secretary of State Marco Rubio will represent America. Former President Trump has made ending the war between Moscow and Kyiv a major focus of his election campaign.
If peace negotiations between Russia and Ukraine progress, concerns about supply disruptions in the oil market may ease, which could put downward pressure on oil prices.