Oil Holds Gains as Iraq Dispute Curbs Exports, Bank Fears Wane

Oil held on to gains from its biggest rally of the year as a disagreement between Iraq and Kurdish officials curtailed crude exports.

(Bloomberg) — Oil held on to gains from its biggest rally of the year as a disagreement between Iraq and Kurdish officials curtailed crude exports.

A legal dispute between Baghdad, Kurdistan, and Turkey has halted around 400,000 barrels a day of flows, constricting global supplies. The dollar slid Tuesday, adding further support for commodities priced in the currency.

So far, the market was brushing off a pileup of crude off the coast of France as widespread strikes there force most of the nation’s fuelmakers to halt operations. Strong Asian demand for the barrels has prevented prices from sliding.

While oil has rallied from recent lows as fears of a banking meltdown have receded, it remains on track for a fifth monthly decline amid concerns over a potential US recession and resilient Russian energy flows. Most market watchers are still betting that China’s recovery will accelerate and boost prices later this year as demand rebounds.

Meanwhile, OPEC+ is showing no signs of adjusting oil production when it meets next week, staying the course amid turbulence in financial markets, delegates said.

Investors will be watching comments from several US Federal Reserve officials, as well as a key measure of US inflation due this week, for clues on the path forward for monetary policy. Interest-rate hikes have added to bearish sentiment.

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