Oil is heading for a monthly gain on forecasts for rising demand and as Turkey threatened to halt Kurdish exports through its territory after the region voted for independence from Iraq.
Futures were little changed in New York, up 9 percent this month. OPEC and the International Energy Agency earlier this month boosted demand forecasts, signaling the surplus that has weighed on prices may shrink further. U.S. Gulf Coast refiners resuming operations after Hurricane Harvey hit the coast at the end of August contributed to price gains. Iraq said Thursday that Turkey agreed to deal exclusively with its government over exports of Kurdish crude.
Oil this week returned to a bull market while Trafigura Group and Citigroup Inc. flagged a possible supply squeeze as early as 2018. The output cut deal led by members of the Organization of Petroleum Exporting Countries is scheduled to expire at the end of March, with the group and its allies said to discuss prolonging the curbs by more than three months.
“There is a bullish feel to the market at the moment,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney. “It looks like oil is starting to get close to the top end of the range, but geopolitical issues like the Kurdish situation could become a hot point for the market.”
West Texas Intermediate for November delivery was at $51.46 a barrel on the New York Mercantile Exchange, down 10 cents, at 7:45 a.m. in London. Total volume traded was about 58 percent below the 100-day average. Prices lost 58 cents to close at $51.56 on Thursday, and are up 12 percent this quarter, set for the biggest quarterly advance in more than a year.
Brent for November settlement, which expires Friday, was unchanged at $57.41 a barrel on the London-based ICE Futures Europe exchange after falling 0.9 percent on Thursday. Prices are up 9.6 percent this month and almost 20 percent higher this quarter. The global benchmark crude traded at a premium of $5.94 to WTI.
Global oil demand will climb this year by the most since 2015, the IEA said earlier this month in a report. OPEC raised its estimates for the amount of crude it will need to supply next year on increased demand projections for Europe and China, according to a separate report.
The semi-autonomous Kurdish region exports less than 600,000 barrels a day, according to the Kurdistan Regional Government’s Ministry of Natural Resources. There were no disruptions to supply as of Thursday.