Oil holds surge as halt to Türkiye flows adds to market optimism

The legal dispute between Türkiye, Iraq and its Kurdistan region meant that the former halted oil export by 400,000 barrels a day from Ceyhan port. Simultaneously, banking optimism sprouted.
Photo: Umit Bektas/Reuters/Ritzau Scanpix
Photo: Umit Bektas/Reuters/Ritzau Scanpix
By Elizabeth Low, bloomberg news

(Bloomberg) Oil held the biggest daily rally since October as a disruption to supply from Türkiye added to easing concerns over the banking crisis.

West Texas Intermediate futures traded near USD 73 a barrel after jumping more than 5 percent on Monday. A legal dispute between Iraq, its semi-autonomous region of Kurdistan and Türkiye have halted around 400,000 barrels a day of exports from Ceyhan port, tightening the market. That’s coincided with optimism that the worst of the recent banking turmoil may be over.

“It does look like the panic of the past fortnight is abating, which should allow crude to float back up,” said Vandana Hari, the founder of Vanda Insights in Singapore. “The situation is still fragile, I don’t think anyone is 100 percent sure that the Western banking sector is out of the woods.”

Oil remains on track for a fifth monthly decline as concerns over a potential US recession and resilient Russian energy flows weighed on prices. Most market watchers are still betting that China’s recovery will accelerate and boost prices later this year, with a top Chinese producer forecasting a surge in demand.

Investors will be watching comments from several Federal Reserve officials and a key measure of US inflation this week for clues on the path forward for monetary policy. Interest-rate hikes have added to bearish sentiment.

Prices:
  • WTI for May delivery rose 0.2 percent to USD 72.94 a barrel as of 7:20 a.m. in London.
  • Brent for May settlement dipped 0.2 percent to USD 77.99 a barrel.

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