Oil prices ended little changed on Tuesday, steadying after earlier gains and losses, as expectations of high USA production and exports offset concerns that fighting between Iraqi and Kurdish forces could threaten the country's crude output. Brent crude advanced by 20 cents to $58.02 a barrel (bbl) by 6:35 a.m. CST (11:35 GMT), up by about a third from its mid-year levels. If prices remain high the outlook may be positive for breakbulk operators serving the oil sector as the higher price point supports renewed investment in offshore development.
Civilian workers at both fields were reportedly sent home following a build-up of Iraqi military forces around the sites.
The Organization of Petroleum Exporting Countries has a compliance rate with their output cut pledges of about 86%, the executive director of the International Energy Agency said on Tuesday.
USA crude inventories fell 5.7 million barrels last week, the Energy Information Administration said, exceeding analysts' expectations.
The oil market is grappling with intensifying geopolitical risks as uncertainty swirls over the impact of tensions surrounding nations such as Iraq, Iran and the USA, according to Goldman Sachs Group Inc.
Escalating tensions between Iraq's central government and the semi-autonomous Kurdish region have boosted crude prices in recent days, amid concerns the conflict could crimp exports from the area.More news: Mobile eliminates free unlimited LTE perk for Canada and Mexico travelers
While the Kurdistan-Iraq standoff is a risk to shorter-term oil production, the increased tensions between neighboring Iran and the US are a longer-term and bigger threat to global oil supplies, according to Goldman Sachs.
"In the case of Kurdistan, the 500, 000 bpd Kirkuk oil field cluster is at risk with initial reports that 350, 000 bpd has shut in although this remains unclear", Goldman Sachs said on Tuesday. President Donald Trump last week refused to certify Iran's compliance with a 2015 global agreement to curb the Islamic Republic's nuclear program in exchange for economic sanctions relief.
The $1.50-a-barrel rally in Brent crude, the benchmark for more than half the world's oil, since Friday morning could be interpreted as reflecting expectations for an outage of 250,000 barrels a day over three months, Goldman said.
Analysts said traders built fresh positions following crude oil prices jumping in Asian trade as data showed a drop in United States stockpiles.
US inventories fell by 7.13 MMbbl last week, the American Petroleum Institute was said to report. "Collectively, OPEC countries lost more than $1 trillion".
The euro traded at $1.1782, slightly down from the previous day.