Oil prices dipped on Tuesday with Brent crude oil prices down 1 percent following the rally in oil prices after Turkey threatened to cut crude exports, putting pressure on Iraq’s Kurdistan autonomous region.
The referendum in the Kurdistan region of Iraq for independence which shows signs of a favourable majority has led to threat of a cut off of 500,000 barrels per day of crude by President Tayyip Erdogan, the Turkish President. This will result in a combined loss of 1.8 million barrels per day which has raised concerns after OPEC and non-OPEC members have indicated that they plan to cut further oil outputs. This resulted in a rally of profit taking by investors over the last two days.
Vienna based analysts at JBC Energy said that the biggest contributor to the rally in oil prices, that is making the news headlines is the referendum of Iraq in the Kurdistan region.
Brent fell to $58.35 a barrel, a drop of 61 cents from a high of $59.49.
US crude futures fell 0.5 percent, or 26 cents to $51.96 a barrel from a high of $52.43.
At the APPEC conference in Singapore, oil executives from S&P Global Platts said that because of the demand for oil the market was helping inventory draw down and is re-balancing the market.
The higher oil output by the US has other analysts skeptical about further price gains. A report by the EIA said imports in US crude stocks climbed to 4.6 million barrels with production rising by 734,000 barrels per day.
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