Oil & Gas News

Oil steady as supply disruptions offset Omicron fears

Oil, Libya

By: Bozorgmehr Sharafedin – ReutersOil prices were largely steady on Monday as supply disruptions in Kazakhstan and Libya offset worries stemming from the rapid global rise in Omicron infections.

Brent crude fell 13 cents, or 0.2%, to $81.62 a barrel at 1136 GMT, and U.S. West Texas Intermediate (WTI) crude was down 17 cents, or 0.2%, at $78.73 a barrel.

Both contracts had risen around 50 cents earlier in the session.

Oil prices gained 5% last week after protests in Kazakhstan disrupted train lines and hit production at the country’s top oilfield Tengiz, while pipeline maintenance in Libya pushed production down to 729,000 barrels per day from a high of 1.3 million BPD last year.

More: Sell or lease your oil and gas mineral rights HERE

Kazakhstan’s largest oil venture Tengizchevroil (TCO) is gradually increasing production to reach normal rates at the Tengiz field after protests limited output there in recent days, operator Chevron (CVX.N) said on Sunday.

“The tailwind lent to oil prices by supply concerns should therefore abate, which suggests that prices will fall this week,” Commerzbank analyst Carsten Fritsch said.

The fall of Azeri crude oil exports from Turkey’s Ceyhan port lent some support to prices. February exports were set at 14.72 million barrels, down from 17.27 million in January, a schedule seen by Reuters showed.

Oil is also drawing support from rising global demand and lower-than-expected supply additions from the Organization of the Petroleum Exporting Countries, Russia and allies, or OPEC+.

OPEC’s output in December rose by 70,000 BPD from the previous month, versus the 253,000 BPD increase allowed under the OPEC+ supply deal which restored output slashed in 2020 when demand collapsed under COVID-19 lockdowns.

Strong demand and sharp fall in oil inventories have pushed the market structure for Brent and U.S. crude into deep backwardation.

A backdated market structure means the current value is higher than it will be in later months and encourages traders to release oil from storage and sell it promptly.

Oil

A surge in COVID-19 infections, however, put pressure on oil prices. Despite early studies showing a lower risk of severe disease or hospitalization from Omicron compared to the previously dominant Delta variant, healthcare networks across Spain, Britain, Italy, and elsewhere have found themselves in increasingly desperate circumstances.

More: Stay informed on oil & gas news. Sign up for our weekly FREE oil and gas newsletter HERE

The crossroads of energy information for minerals owners in Oklahoma. Where you can: See recent prices of mineral and lease transactions. Receive an offer to lease or buy your minerals.

Find relevant news stories on the most active areas, including the Scoop and Stack Plays.

Data Powered by Oseberg

Today’s E&P world is rapidly shifting towards data-driven decision making, but those decisions are only as good as the data behind them. Access Oseberg's deep, accurate, and detailed pool of insight-rich industry data with our powerful analytical and search tools and get the clearest picture of what's happening as soon as it happens.

Disclaimer

This web site is maintained solely for the personal use of our visitors. Although we at Oklahoma Minerals have made all reasonable efforts to provide accurate information, we cannot guarantee the completeness, timeliness or accuracy of the information contained herein. Nothing in this web site contains investment advice. Any decisions based upon the information contained in this web site are the sole responsibility of the user.

Copyright © 2022 OklahomaMinerals.com

To Top
Want to know what your minerals are worth? Contact us today! ➡️Free Consultation