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Oil Extends Gains on Kurdish Supply Risks and Banking Relief

LONDON, March 28 (Reuters) - Crude prices edged higher on Tuesday, extending sharp gains from the previous session on supply disruption risks from Iraqi Kurdistan and hopes that turmoil in banking is being contained.

Brent crude futures gained 15 cents, 0.2%, to $78.27 a barrel by 1308 GMT. West Texas Intermediate U.S. crude was up 14 cents, or 0.2%, at $72.95.

Prices rallied more than $3 on Monday after Iraq was forced to halt exports of about 450,000 barrels per day (bpd) from its northern Kurdistan region through Turkey after an arbitration decision confirmed Baghdad's consent was needed to ship the oil.

Monday's announcement that First Citizens BancShares Inc will acquire deposits and loans of failed Silicon Valley Bank spurred optimism about the banking sector and sent European bank shares higher.

"At the moment, concerns about the risk to financial stability has been relegated to the back of investors’ mind but another bank run could trigger a flight out of risk again," said PVM Oil analyst Tamas Varga.

Oil prices were also expected to draw continued support from signs of recovering demand in China.

China's crude oil imports are expected to rise by 6.2% in 2023 to 540 million tonnes, an annual forecast by a research unit of China National Petroleum Corp showed on Monday.

Russian Deputy Prime Minister Alexander Novak on Tuesday said that Russia needed to focus on boosting energy exports to so-called "friendly" countries and noted that Russian oil supply to India regstered a 22-fold jump last year.

U.S. crude oil stockpiles were seen rising by about 200,000 barrels last week, a preliminary Reuters poll showed on Monday.

The American Petroleum Institute (API) will publish its inventory data at 4:30 p.m. EDT (2030 GMT) on Tuesday and the U.S. Energy Information Administration at 10:30 a.m. (1430 GMT) on Wednesday.

Reporting by Ahmad Ghaddar Additional reporting by Sudarshan Varadhan and Mohi Narayan Editing by David Goodman

Source: Reuters

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