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The drop in US crude stocks adds to the sense of tighter supplies

The price of oil rose on Wednesday for the second consecutive day as an industry report revealed that U.S. crude stocks fell last week. This added to the feeling in markets about tightening supply.

Brent futures were up 27 cents at $67.90 per barrel as of 0005 GMT. U.S. West Texas Intermediate Crude Futures rose 28 cents to $63.99.

The benchmarks rose by more than $1 per barrel as the deal to resume oil exports from Iraqi Kurdistan fell through. This halted pipeline shipments from the region into Turkey, despite the hopes that a deal would be reached to end the deadlock. Two key producers demanded debt repayment guarantees.

An agreement reached between the Kurdish region and federal government of Iraq and oil companies will allow for a return of exports of approximately 230,000 barrels of oil per day. Since March 2023, pipeline flows have been halted.

API figures released later in the day showed that U.S. crude, gasoline, and distillate stock levels fell last week while they rose the previous week, according market sources who cited the API data.

Sources said that crude stock levels fell by 3.82 millions barrels during the week ending September 19. Gasoline inventories also fell by 1,05 million barrels, and distillate stocks rose by 518,000.

On Wednesday, the official U.S. energy data will be released. It is expected that crude oil and gasoline stocks have increased and distillates are likely to decline.

Other signs of tightening of supply include reports that U.S. giant Chevron, which produces crude with Venezuelan partners at a rate of 240,000 barrels per day (bpd), will only be able export half.

The company was granted a new operating permit in July to continue operations in Venezuela, but new rules mean that less heavy crude oil with high sulphur produced there will be exported to the U.S.

(source: Reuters)