U.S. West Texas Intermediate crude futures dropped 0.64% to $50.97 a barrel. It settled Tuesday at $51.88, its highest level since September 27 for a second session in a row and had climbed above $52 a barrel intraday, a level it has failed to retouch so far Wednesday.
Despite prices dipping after reports of Iraqi forces taking control of previously Kurdish-held oil fields, Brent crude futures were still at $57.70 at 0646 GMT, 2.7 percent higher than last Friday's settlement and nearly a third above mid-year levels. "Builds in refined products and a setback in refined product demand provides weight to the energy complex".
The elevated prices came as Iraqi government forces captured the major Kurdish-held oil city of Kirkuk on Monday, responding to a Kurdish independence referendum.
According to some reports, Kurds had shut down some 350, 000 barrels per day (bpd) of production from major fields Bai Hassan and Avana because of security worries.
The report comes at a time when the price of crude oil saw an increase following the instability in the Northern Iraq, where Iraqi official forces are seeing a tensed confrontation with Kurdish forces.
"We have kept buying USA crude since we made our first purchase of it, nearly 2 million barrels every month because we found the economics of USA crude are good", said Kim Woo-kyung, a spokeswoman at SK Innovation, which owns SK Energy. U.S. President Donald Trump on October 13 refused to certify Iran's compliance over a nuclear deal, leaving Congress 60 days to decide on further action against Tehran.
However, Iran's deputy oil minister, Amir Zamaninia, insisted Tuesday at an oil industry conference in London that Mr. Trump's decision would have "little or no effect on our future plans on the oil industry". "Geopolitical risk is somehow priced in", he said.
The American Petroleum Institute reported late Tuesday that crude oil inventories in the United States moved lower last week by 7.1 million barrels. The deal was extended in May through March 2018 and participants have indicated in recent weeks they could potentially prolong the agreement through the end of next year. The rising interest towards alternative energy sources has forced oil producers to check the production of crude oil in order to control the decline in prices.
USA inventories fell by 7.13 MMbbl last week, the American Petroleum Institute was said to report.
-Benoit Faucon contributed to this article.