On Monday, oil prices increased by more than $3 as concerns about oil supply increased as Iraq halted certain exports from Kurdistan region. Meanwhile, U.S. banking acquisition reduced concerns about the impact of financial upheaval on the economy and fuel demand.
Brent crude futures ended the day at $78.12 per barrel, up $3.13 or 4.2%. West Texas Intermediate U.S. crude concluded the trading day at $72.81, up $3.55, or 5.1%.
While concerns in the financial sector subsided, WTI recovered by 3.8%, and Brent increased by 2.8% last week.
Prices rose as Turkey stopped transferring crude from Kurdistan through a pipeline after an arbitration decision. It exports around 5% of the world’s oil supply, or 450,000 barrels per day.
John Kilduff, partner at Again Capital LLC in New York, believes that the loss of oil supplies from Kurdistan may counter the impact of Russian production and supplies reaching the market. In the Kurdish region, it can potentially compel output reductions.
First Citizens BancShares Inc (FCNCA.O) closed the crisis that roiled the financial markets and announced that it would purchase the deposits and loans of the defunct Silicon Valley Bank (SIVB.O).
Rise in Wall Street stocks after increased emergency lending facilities and bank funding
After news that U.S. officials were in the early stages of debating increasing emergency lending facilities, there are also expectations for increased support for bank funding.
As a result of the banking agreement providing some relief after recent volatility, Wall Street stocks rose.
Concerns about global unrest after Russian President Vladimir Putin’s plans to post tactical nuclear weapons in Belarus, one of Russia’s most dramatic nuclear signals to yet, also helped to support oil prices.
According to Alexander Novak, the deputy prime minister of Russia, Moscow is almost at its goal of reducing crude output by 500,000 barrels per day (bpd), or to roughly 9.5 million bpd.
Nonetheless, Reuters’ calculations and data from industry sources on Friday indicated that Russia’s oil exports remain stable even as it reduces refinery production in April.