On Tuesday, oil prices continued their rise that began the day before. The reasons for this were the suspension of production at Norway’s Johan Sverdrup field, the largest in Western Europe, and a reduction in production in Kazakhstan. Geopolitical tensions between Ukraine and Russia are also affecting market sentiment, Reuters reports.
Price dynamics
- Brent (January delivery): up 15 cents (+0.2%) to $73.45 per barrel.
- WTI (December delivery): reached $69.31 (+0.2%).
- The January WTI contract also rose by 13 cents to $69.30.
On Monday, both benchmarks rose by more than $2 per barrel due to unexpected production disruptions.
The main factors of influence
- Production stopped at Johan Sverdrup (Norway):
The field, operated by Equinor, has stopped production due to a power outage. Restoration works are ongoing, but the timing of the return to production is not yet known. Johan Sverdrup is a key source of oil supply to Europe. - Reduced production in Kazakhstan:
Production at the Tengiz field, owned by US-based Chevron, has fallen by 28-30% due to repairs. According to the Ministry of Energy of Kazakhstan, the repairs are expected to be completed by Saturday. - Geopolitical tensions:
- The US has allowed Ukraine to use long-range missiles to strike targets in Russia.
- On Sunday, Russia launched its largest air strike on Ukraine in three months, causing significant damage to the country’s energy infrastructure.
- Changes in WTI contracts:
Traders are gradually switching from the December contract to the January contract as the former expires on Wednesday.
Forecasts.
Ongoing production disruptions and geopolitical risks create the potential for further price increases, although the situation may change once repairs are completed and supplies stabilise.
The global oil market, which is sensitive to production and geopolitical developments, remains in a state of tension.
