Crude oil is up again this morning, and has been strengthening for most of the week. As we wrote yesterday, Iraqi forces captured Kirkuk, its airport, military base and surrounding oil fields in an operation yesterday. An escalation of the military conflict would threaten Kirkuk-area oil supply, which is currently producing 500,000 barrels per day. For now, the Kirkuk oil fields continue to operate normally. Data from the American Petroleum Institute also helped prices, as crude inventories continue to fall. While gasoline stocks were much higher than estimated, falling crude inventories help support the ongoing narrative of falling supply driving higher prices.
WTI remains above $50, and is currently trading just above $51.90. Brent crude is currently above $58.20. After entering overbought conditions two weeks ago, crude oil is now trading within a normal range.
Looking at US crude oil stocks, last week EIA figures showed falling crude oil stocks and rising gasoline inventories. While crude oil inventories fell slightly more than expected (2.7m vs. 2.4m barrels expected), gasoline stocks surged (2.5m vs. 0 expected). US crude inventories have been falling as a significant portion of Gulf Coast refiners remain offline thanks to Hurricane Harvey. Looking at reactions in markets, crude oil prices fell following the EIA report, which also showed growing US oil exports.