Oil prices fell back below 24 dollars a barrel on Thursday as the market digested indications that Iraq was ready to resume exports through Turkey.
Cold weather on both sides of the Atlantic and lower US reserves for heating oil could not underpin the market, and Brent North Sea crude for February delivery slipped to 23.85 dollars a barrel from 24.04 overnight.
In New York, the February light sweet crude contract fell 17 cents on Wednesday to 26.47 dollars.
Prices had been galvanized of late by falling temperatures in the United States and warnings from members of the Organization of Petroleum Exporting Countries (OPEC) that it was time to cut output to give prices a fresh shot in the arm.
But rumors that Iraq was ready to resume exporting through Turkey persuaded market players that fresh crude supplies would soon be hitting the market.
"The market could not sustain its strength as news concerning Iraqi exports from the Ceyhan port dampened buyers' spirits," said the GNI brokerage in a research note.
Having suspended exports at the end of November amid a row with the United Nations over the oil-for-food program, Iraq began shipping out crude again earlier this month from the Mina-al-Bakr port in the south of the country, according to UN officials in Baghdad.
But the officials have as yet given no word on the status of Iraqi exports which leave the country through a pipeline into Turkey, for ultimate export from the Ceyhan terminal.
With the market factoring Iraq's 2.4-million-barrels-a-day export capacity back into the equation, fresh US stock figures showing a fall in refined products had but a limited impact on prices.
Crude stocks fell last week by two million barrels to 288.98 million barrels, according to the American Petroleum Institute.
Gasoline stocks fell 2.1 million barrels to 197 million, while distillate fuel stocks, which include heating oil used for domestic energy, fell 1.9 million barrels to 114.7 million – LONDON (AFP)
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