As the world’s best investment manager and financial market’s journalist, I bring you the latest insights on the oil market. Oil prices saw a slight decline in early Asian trade on Tuesday, following significant gains in the previous session. The surge was fueled by production disruptions in Norway and heightened tensions in the Russia-Ukraine conflict.
After hitting near three-week lows, prices rebounded on Monday, attracting bargain buyers. However, concerns about global demand and a potential oversupply continue to weigh on oil prices.
Crude oil futures expiring in January fell 0.2% to $73.19 a barrel, while Brent crude fell 0.1% to $69.07 a barrel by 20:08 ET (01:08 GMT).
Oil Rises Sharply on Norway Disruptions
Equinor’s announcement of halting production at the Johan Sverdrup oilfield in Norway caused oil prices to surge over 3% on Monday. The oilfield is the largest in Western Europe, and the production halt has raised concerns about oil supplies in the region. Sverdrup, which produced about 755,000 barrels of oil equivalent per day, is expected to see a decline in production in the coming months.
Russia-Ukraine Escalation Buoys Oil
The escalating tensions between Russia and Ukraine have added a risk premium to crude oil prices. The Biden administration’s decision to allow Ukraine to use U.S.-made weapons against Russia has raised concerns about a potential confrontation with NATO. Traders fear that attacks on Russia’s oil infrastructure could impact Moscow’s oil exports.
China Demand, Oversupply Fears Pressure Oil
Oil prices have been under pressure due to concerns about slowing demand in China, the world’s top oil importer. Additionally, fears of a market glut in 2025 have weighed on prices, as production outside the Organization of Petroleum Exporting Countries and allies continues to rise. The U.S. remains a key player in oil production, with output close to record highs above 13 million barrels per day.