Oil prices fell on Tuesday, following the previous day’s rise due to the halt in production at Norway’s Johan Sverdrup oil field, but investors remained cautious amid fears of a potential escalation in the war between Russia and Ukraine.
Brent oil futures for delivery in January slipped 7 cents, or 0.1 percent, to $73.37 a barrel by 0119 GMT, while West Texas Intermediate oil futures for delivery in December were at $69.23 a barrel, down 7 cents, or 0.1%. The more active January WTI contract was down 4 cents, or 0.1%, at $69.21.
Both benchmarks climbed more than $2 a barrel on Monday.
“Some position adjustments took place after Monday’s rise,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“But investors remained cautious, assessing the direction of the war between Russia and Ukraine after the weekend’s escalation.
Russia launched its largest air attack on Ukraine in nearly three months on Sunday, causing serious damage to the country’s power grid.
In a significant reversal of Washington’s policy, President Joe Biden’s administration has authorized Ukraine to use U.S.-made weapons to strike deeply at Russia, two U.S. officials and a source familiar with the matter said Sunday. decision.
The Kremlin said on Monday that Russia would respond to what it called a reckless decision by the Biden administration, after warning that such a move would increase the risk of a confrontation with the US-led NATO alliance. UNITED STATES.
At the same time, supply concerns persisted due to production problems in some oil fields.
Norway’s Equinor has halted production at its Johan Sverdrup oil field, Western Europe’s largest, due to an onshore power outage, the company said on Monday. Work to restart production is underway, an Equinor spokesperson said, but a resumption date was not immediately specified.
Kazakhstan’s largest oil field, Tengiz, operated by US company Chevron, has cut production by 28% to 30% due to ongoing repairs, helping to tighten global supplies. Repairs should be completed by Saturday, the country’s energy ministry said.
Traders began shifting WTI trades into the January contract ahead of the December contract’s expiration on Wednesday.
On Monday, WTI moved into contango for the first time since February, with January delivery trading at a premium to the December contract, a sign of easing supply tightness.
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