Oil prices remained volatile on Tuesday morning, with Brent crude trading just above $73 per barrel. This was a slight drop of $0.12 from Monday’s close but still a significant increase from the weekend.
Meanwhile, West Texas Intermediate (WTI) was down $0.14, hovering around $69 per barrel.
Earlier in the day, both benchmarks saw a dip but later recovered, largely driven by rising tensions between Russia and Ukraine, as well as a production outage at the Johan Sverdrup oilfield in Norway.
On Monday, oil markets saw a surge, fueled by geopolitical concerns after the Biden Administration approved the use of U.S. long-range missiles by Ukraine to strike Russian targets. Additionally, the news that production at Norway’s Johan Sverdrup field had been halted due to a power outage pushed prices higher.
Equinor, the company operating the Sverdrup field, quickly resumed partial production. However, the focus shifted to the growing tensions in Ukraine, particularly after Ukraine fired long-range missiles into a Russian region. Russia’s Ministry of Defense called this a major escalation, and President Putin lowered the threshold for a nuclear strike, which raised market anxieties.
By Tuesday, oil prices had eased slightly from the previous day’s spike but eventually returned to Monday’s levels.
At $73 per barrel, Brent is still nearly $10 lower than at this time last year and $4 below where it started 2024.
The U.S. dollar also rose on Tuesday, reaching nearly its highest level in a year. Meanwhile, the Tengiz oilfield in Kazakhstan continues to experience a 30% production decline due to ongoing repairs.
The market remains cautious as traders closely watch potential further disruptions to supply chains. Concerns about slowing demand growth and rising U.S. interest rates continue to add downward pressure on market sentiment.
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