Oil prices declined for a fifth consecutive session on Tuesday, as a preliminary agreement reached between Iraq and Kurdish regional governments to restart an oil pipeline added to oversupply concerns.
Brent crude futures lost 42 cents or 0.63 per cent at $66.15 a barrel by 0332 GMT while U.S. West Texas Intermediate crude was down 36 cents or 0.58 per cent at $61.92 a barrel.
Both contracts sat on a five-session losing streak, down by 4 per cent.
“The prevailing theme is still concerns on oversupply, while demand outlook is still uncertain as we approach year-end period. The restart of KRG pipeline has also been putting pressure on prices,” said LSEG senior analyst Anh Pham.
Iraq’s federal and Kurdish regional governments reached a deal with oil firms to resume crude exports via Turkey on Monday, two oil officials told Reuters.
The breakthrough will allow exports of about 230,000 barrels per day (bpd) to resume from Iraqi Kurdistan which have been suspended since March 2023.
Overall, the global oil market is bracing for elevated supply and slowing demand hampered by the fast development of electric vehicles and economic woes fuelled by tariffs.
In its latest monthly report, the International Energy Agency said world oil supply will rise more rapidly this year and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the group grows.
Still, risks overhang the market as traders monitor the European Union’s consideration of stricter sanctions on Russian oil exports, as well as any escalation of geopolitical tensions in the Middle East.
U.S. crude oil stockpiles were expected to have risen last week, while gasoline and distillate inventories likely fell, a preliminary Reuters poll on Monday showed.
Elsewhere, Saudi Arabia’s crude oil exports in July hit their lowest level in four months, according to data from the Joint Organizations Data Initiative (JODI) released on Monday.
Iraq, the Organization of the Petroleum Exporting Countries’ second-largest producer, has increased oil exports under an OPEC+ agreement, state oil marketer SOMO said.
