A potential squeeze on oil supply if Kurdish crude flows suffer disruption after the region's independence vote has pushed Brent futures' premium over rival benchmarks to multi-year highs.
"If this boycott call proves successful, a good 500,000 fewer barrels of crude oil per day would reach the market", analysts at Commerzbank said. "The information reason - a series of hurricanes and their consequences in the United States - has already exhausted itself, and other information reasons for raising oil prices are not expected now", he explained.
Oil has gained about 10 per cent this month in NY and its global counterpart traded in London reached a two-year high on Monday amid forecasts for rising consumption in the face of output cuts by the Organisation of Petroleum Exporting Countries' and partners including Russian Federation.
West Texas Intermediate, the US reference price, has lagged behind as USA fuelmakers were hobbled by Harvey and unable to process as much crude. It was last trading up $1.10, or 2.2 per cent, at $51.76.
Fuel prices are also rising as US refineries come back online in the wake of Hurricane Harvey, providing boost to crude prices.
"We need not only to keep up the pace but continue our coordinated joint actions in full, but also work out a strategy for the future, to which we will stick starting from April 2018", he said, adding oil demand was rising at a "high pace".
Backwardation refers to a market structure where oil for immediate delivery is costlier to that meant for later shipment.
Brent was down 62 cents at $57.28 a barrel, after hitting a more than two-year high of $59.49 on Tuesday after Monday's referendum vote prompted Turkey to threaten to close the region's oil pipeline. The International Energy Agency earlier this month raised its forecast for demand growth this year and now expects an increase of 1.6 million barrels a day. The Department of Energy reported that over the last month product demand averaged 20.3 million barrels per day, up by 1.3% from the same period a year ago.
In the past three months, the price of Brent crude oil-the worldwide benchmark-has steadily climbed by almost 30%, reaching nearly $60 a barrel this week.
For 2018, PublicInvest estimated the Brent oil price levels to average at US$55 per bbl.
Although current supply and demand fundamentals point to a possible rise in oil prices by the end of 2017, next year's supply will likely outgrow demand and depress oil prices, according to a panel of industry analysts at the S&P Global Platts Asia Pacific Petroleum Conference.
Gasoline futures rose 0.61 cent, or 0.38%, to $1.6281 a gallon.