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Oil little changed; lower US crude stockpiles provide floor

The oil prices remained stable on Wednesday, as an industry report revealed that U.S. crude stocks declined in the past week. This added to the feeling of a tightening supply.

Brent futures were up 3 cents at $67.66 per barrel as of 0630 GMT. U.S. West Texas Intermediate Crude Futures rose 5 cents to $63.46.

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 the export of approximately 230,000 barrels of oil per day. Since March 2023, pipeline flows have been halted.

Emril Jamil is a senior oil analyst at the LSEG. He said that prices are expected to be supported, but range-bound.

Jamil said that while the price gains have been capped by the uncertainty surrounding interest rate decisions from the U.S. Federal Reserve, they are still expected to continue.

According to sources citing API data, American Petroleum Institute figures show that U.S. crude, gasoline, and distillate stock levels fell last week while they rose for distillates.

Sources said that crude stock levels fell by 3.82 millions barrels during the week ending September 19. Gasoline inventories dropped by 1.05million 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, will only be able export half of its 240,000 barrels of crude per day.

The company was granted permission to operate in Venezuela in July. However, due to the new rules, less heavy, high-sulfur crude will be exported from Venezuela.

(source: Reuters)