Oil prices seesaw as traders focus on Iraq disruptions, United States shale

Brent weekly chart

Meanwhile, Brent oil LCOZ7, -0.12% dropped 11 cents, or 0.2%, to $57.65, but had also traded higher earlier in the day.

West Texas Intermediate oil for December delivery CLZ7, +0.37% rose 5 cents, or 0.1%, to $51.89, adding to a 0.6% gain from Friday.

Oil prices settled higher in see-saw trade on Friday, as political tensions in the Kurdistan region continued to disrupt crude supplies.

Investors were evaluating the aftermath of the Kurdish vote for independence, which triggered an aggressive response from Iraq.

The drop in supplies from Iraq comes as the Organization of the Petroleum Exporting Countries, Russia and other producers are cutting output by about 1.8 million bpd until March 2018 in an effort to get rid of a glut and support prices.

Iraq said the two countries would continue to cooperate in implementing decisions by oil exporting countries.

"There is spare capacity in the USA and in OPEC nations that makes it hard for Brent to go above $60, so it is stuck in a relatively small range", said Olivier Jakob, managing director at oil consultancy Petromatrix.

The reduction in the output of U.S. production also increased the North American WTI crude benchmark. "That's an illustration of what the market can do when it has spare capacity".

Given the tightening oil market conditions, many analysts expect prices to rise further.

Oil prices rose on Monday, October 23, over supply concerns in the Middle East and as the USA market showed further signs of tightening while demand in Asia keeps rising.

Oil exports from Iraq's Kurdistan via the Turkish Mediterranean port of Ceyhan were flowing at about 255,000 barrels per day (bpd) on Monday, a shipping source said. The production is still suspended as part of an agreement between the OPEC and non-OPEC producers to tighten the market.

"There has been a veritable shale oil drilling party", Mr. Jakob of Petromatrix said. "US shale oil completions have been rising every month since January", he said.

The NASDAQ rose 0.36% and closed at 6,629.1 on October 20, 2017. ICE gasoil changed hands at $533.50 a metric ton, up $0.50 from the previous settlement.

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