SINGAPORE Oil was nearly unchanged on Thursday as a surprise drop in U.S. crude stockpile offset a smaller-than-expected cut to Russian supplies, while investors closely watched developments on Iraqi Kurdistan oil exports.
Brent crude futures fell 5 cents, or 0.1 per cent, to $78.23 a barrel at 0630 GMT, while West Texas Intermediate crude fell 12 cents, or 0.2 per cent, to $73.09 a barrel.
Producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq after a halt to the northern export pipeline, with more outages on the horizon, company statements showed.
Analysts from Citi said that the Kurdistan-Iraq premium in oil prices could vanish sooner than expected.
The change in Iraq's domestic politics could lead to a political settlement very soon, according to Citi, whose estimates are that pipeline flows could grow by some 200,000 barrels per day bpd. The U.S. crude oil stockpiles could drop in price declines, with imports falling to a two-year low, according to the U.S. Energy Information Administration.
The Reuters poll showed that crude inventories fell by 7.5 million barrels to 473.7 million barrels in the week to March 24, while analysts were expecting to see a rise of 100,000 barrels in the week to March 24.
The gasoline stocks fell by 2.9 million barrels to 226.7 million barrels, compared to analysts' expectations for a 1.6 million barrel drop.
The National Australia Bank said that there would be a seasonal strengthening in demand by the end of Q 2 that will drive oil prices higher from current levels.
The analysts said that although oil prices fell slightly on Thursday, they remained within the trading band seen since the beginning of 2023.
Russia's crude production fell by around 300,000 barrels per day in the first three weeks of March, less than the targeted cuts of 500,000 barrels per day, sources familiar with the data told Reuters.