2024-01-23T16:04:13+00:00
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/ Oil prices fell on Tuesday evening, losing some of the gains they made yesterday and during the day, as traders are studying a set of conflicting and worrying data on the supply and demand fronts, with increasing tension in the Middle East, and problems related to cold weather causing production disruptions in the United States.
Volatility remains the dominant feature of oil futures, with uncertainty persisting over many supply and demand indicators.
Both crudes rose about 2 percent on Monday, as a Ukrainian drone attack on Novatek’s Ust-Luga fuel export terminal raised supply concerns and sent prices higher.
Analysts expect Novatek to largely resume operations there within weeks.
While the damage to the terminal’s loading docks “briefly impacted exports,” the move raises the prospect of the Russia-Ukraine war moving into a new phase, with both sides targeting key energy infrastructure, analysts at ANZ Research said in a report.
In the Middle East, US and British forces carried out a new round of strikes targeting an underground Houthi storage site and missile and surveillance capabilities used by the Houthi group.
Houthi attacks on ships in and around the Red Sea have disrupted global shipping and raised fears of inflation.
Some analysts remain optimistic about the market’s near-term fundamentals due to these ongoing struggles.
In Libya, production resumed at the Sharara oil field, which has a production capacity of 300,000 barrels per day, after the end of protests that halted production since early this month.
In the United States, the North Dakota Pipeline Administration said on Monday that 20 percent of the state’s oil production remained shut down due to severe cold and operational difficulties.
“Without any recession concerns, the impact of severe weather on U.S. oil production and escalating geopolitical conflicts are still supporting oil prices,” said Leon Li, an analyst at CMC Markets in Shanghai.
A Reuters poll showed U.S. crude oil inventories fell by about three million barrels in the week ending Jan. 19.
By 14:25 GMT, Brent crude futures were down 0.86 percent, or 68 cents, at $79.38 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 56 cents, or 79.38 percent, at $74.23 a barrel.
Brent crude fell again below $80 a barrel after settling above it on Monday for the first time since December 26.