Oil prices were relatively stable in ongoing trading on Monday. Brent crude was trading at $86.09 a barrel on Monday morning, down just a little from $0.22 on Friday. US light oil West Texas Intermediate (WTI) is trading at $82.20 a barrel, down $0.32 from the previous day.
The International Energy Agency (IEA) warned in its monthly bulletin last week that the output cuts announced by OPEC+ producers risk exacerbating an oil supply deficit expected in the second half of the year, hurting consumers and a global economic recovery.
Also, oil exports from northern Iraq to the Turkish port of Ceyhan will be halted for almost three weeks after an arbitration case ruled that Ankara owed Baghdad compensation for unauthorized exports, Reuters reports.
Rising costs for Middle Eastern crude, which supplies more than half of Asia’s demand, are already squeezing refiners’ margins and prompting them to secure supplies from other regions. Refineries are also ramping up gasoline production ahead of the summer peak demand, while they may cut diesel production (and heating oil production) amid deteriorating margins.