Oil extended its recovery rally as a disagreement between Iraq and Kurdish officials curtailed exports and fears of a banking meltdown receded.

A legal dispute between Iraq, Kurdistan, and Turkey has halted around 400,000 barrels a day of flows, constricting global supplies. The dollar slid Tuesday, adding further support for commodities priced in the currency. 

The market shrugged off concerns of a buildup of crude vessels along the coast of France as widespread strikes there forced most of the nation’s fuelmakers to halt operations. Strong Asian demand for the barrels has prevented prices from sliding.

While oil has rallied from recent lows as the banking sector stabilizes, it remains on track for a fifth monthly decline amid concerns over a potential U.S. recession and resilient Russian energy flows. Most market watchers are still betting that China’s recovery will accelerate and boost prices later this year as demand rebounds.

Meanwhile, OPEC+ is showing no signs of adjusting oil production when it meets next week, staying the course amid turbulence in financial markets, delegates said.  Investors will also be watching comments from several US Federal Reserve officials, as well as a key measure of U.S. inflation due this week, for clues on the path forward for monetary policy. Interest-rate hikes have added to bearish sentiment.

Prices:

• WTI for May rose 84 cents to US$73.65 a barrel at 2:07 p.m.
• Brent for May settlement rose 89 cents to US$79.01 a barrel