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With production in Iraq remaining relatively safe and stockpiles in the US increasing, crude oil prices are on track to record their first weekly drops since near the start of the year.
Futures on the energy commodity in London markets are on the verge of a 1.4% drop for the week putting Brent in a position to stumble to low prices last seen in March. The US benchmark West Texas Intermediate (WTI) has similarly lost 1.3% of its value so far during the same period. Each barrel was down to $105.83 on the New York Mercantile Exchange with its European counterpart holding a lowered premium of $7.46 over it.
Stockpiles in the US surprisingly increased by 1.74 barrels to total 388.1 million according to data from the Energy Information Agency. A Bloomberg survey originally forecast a 1.7 million loss.
In the middle east, despite violent clashes continuing to occur between Iraqi government forces and Islamist militants on their northern region, oil production facilities in the second largest producer among the Organization of Petroleum Exporting Countries remain mostly untouched in the south causing prices to scale back down. Last month, Iraq was able to produce 3.3 million barrels of crude thanks to three quarters of their facilities being located on the far southern end of the country.
Current market prices seem to already reflect the south being spared from production interruptions, but traders and analysts surveyed by Bloomberg are split with their forecasts with 39% saying prices will still increase in the coming weeks and 24% saying this week’s downward trend to continue.
