Oil prices retreat on supply concerns; central banks, economic data in focus
Investing.com — Oil prices fell Tuesday, handing back early gains as worries over rising supply countered continued Middle East tensions.
By 09:30 ET (14.30 GMT), the U.S. crude futures traded 0.7% lower at $74.22 a barrel and the Brent contract dropped 0.7% to $79.44 a barrel.
The crude benchmarks slipped lower during Tuesday’s session amid uncertainty over several supply and demand indicators.
Norway's crude production rose to 1.85 million barrels per day in December, beating expectations as well as the 1.81 million barrels seen the previous month.
Additionally, production at the Sharara oilfield in Libya restarted at the start of this week after the end of protests that had halted output since early this month.
“The restart of the operations came after the local governments agreed to meet most of the demands from protestors,” said analysts at ING, in a note. “Crude oil production at the oil field stood at around 270Mbbls/d earlier.”
That said, severe cold weather means that supply remains constrained in the United States, with North Dakota’s pipeline authority estimating that oil production in the region was down around 250-300 million barrels a day as of Monday.
”The extreme cold weather in the US has also impacted refining operations in the country with around 15% of refining capacity in the Gulf Coast region reported to be offline as of last Friday,” said analysts at ING, in a note.
The weather-induced shutdowns over the last week could see a drop in crude inventories in Tuesday's American Petroleum Institute weekly report, due later in the session.
Providing support for the crude markets remains the volatile situation in the Middle East, potentially hitting output from this oil-rich region.
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