Growth in oil after closed oil pipeline in Iraq

Oil rose on the first working day of the week after Iraqi government troops clashed with Kurdish forces, violating supply from a region producing more than half a million barrels a day. Iraqi Kurds have stopped production in two areas because of the conflict.

The news from Iraq is a driving force in the oil market, as the country is the second-largest OPEC producer with an average yield of 4.47m barrels per day, much of which is transported by pipelines to ports in the Persian Gulf and Turkey.

Currently, the main oil pipeline delivering oil to the Ceyhan port and responsible for about 90% of the supply is closed. Investors report positive news, with WTI traded close to $52.00.

Technically, the price is in the range between $49.00 and $53.00 after a downward channel breakthrough. Despite the news on Iraq, the price can not cross the horizon about $52.40. Our expectation is that the price will continue to rise only if it succeeds in overcoming the level of horizontal and diagonal resistance. That would be the case if tensions in Iraq were to escalate. On the other hand, if we observe normal market supply, the price of black gold will remain in a narrow range between $50 and $53 a barrel.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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