Morning Highlights: Oil eases as profit-taking, Kurdish deal cap rally

Thursday, September 25, 2025

Crude prices pulled back from seven-week highs Thursday as profit-taking and signs of resumed Kurdish flows tempered bullish sentiment from earlier draws and supply risks.

Market snapshot (as of 06:00 EST):

• Brent (Nov): $68.96 (-$0.35, -0.5%)

• WTI (Nov): $64.58 (-$0.41, -0.6%)

Profit-taking after strong run

Both benchmarks gained ~2.5% on Wednesday after a surprise U.S. crude draw and fresh Ukrainian strikes on Russian infrastructure lifted prices. But with equities in a two-day slide and demand fears re-emerging, traders pared back positions.

Kurdish exports inch closer

Eight operators reached a framework deal with Baghdad and Erbil to restart exports, which could return ~230,000 bpd to the market in coming days, though key players DNO and Genel have yet to sign, pressing for $1 billion in arrears. While flows would restart below pre-2023 levels, the prospect of added barrels weighed on sentiment.

Russian supply disruption vs. diesel tightness

Ukraine’s latest drone attacks hit Gazprom’s Salavat complex, the second strike in a week, compounding Russian refining losses. Diesel markets have surged in response: funds hold their largest net-long in European gasoil since 2022, with record options activity on ICE. European prompt spreads remain firm as autumn maintenance approaches, though India’s record product exports are providing some relief.

Demand concerns building

J.P. Morgan flagged slowing U.S. travel trends, with September passenger throughput up just 0.2% y/y, down from ~1% growth in prior months. Gasoline demand is starting to fade seasonally. Still, distillates remain the focus: U.S. stocks fell 1.7 mb last week, leaving inventories 8% below their five-year average.

Outlook

Oil sits near $69 with a market tug-of-war between profit-taking, incoming Kurdish flows, and still-resilient diesel cracks. Distillate demand and Russian outages are lending support, but oversupply fears into winter are capping upside momentum.