Oil Market Declines as Supply Rebound in US, Libya, Norway

By Adedapo Adesanya

The oil market settled lower on Tuesday as traders focused on rebounding crude output in parts of the US along with rising supply in Libya and Norway, with Brent crude going down by 51 cents or 0.6 per cent to $79.55 a barrel, and the US West Texas Intermediate (WTI) crude dropping 39 cents or 0.5 per cent to $74.37 a barrel.

In North Dakota, the third-largest oil-producing US state, some oil output came back online after shutting because of extreme cold.

Severe cold weather across the US is limiting crude oil output in North Dakota, as well as hampering production in other states.

Over 20 per cent of output in the third largest oil-producing state remained shut in as of Monday after being cut by 50 per cent last week by the extreme cold weather and operational challenges, North Dakota’s pipeline authority said.

However, output was still down as much as 300,000 barrels per day on Tuesday.

Norway’s crude production rose to 1.85 million barrels per day in December, up from 1.81 million barrels per day the previous month, according to the Norwegian Offshore Directorate (NOD).

In Libya, production at the 300,000 barrels per day Sharara oilfield restarted on January 21 after the end of protests that had halted output since early this month.

Also, Russia’s Novatek suspended operations at a Baltic Sea fuel export terminal following a reported drone attack by Ukrainian forces. Meanwhile, other terminals, including one for crude oil exports and two other fuel export terminals, were operational as of Tuesday, Reuters reported, citing industry sources and LSEG data.

Russia’s Ust-Luga port on the Baltic Sea continued to ship crude and fuels for exports as Novatek’s fuel export terminal remained shut following the attack.

Also, in the Middle East, tensions rose after US and British forces carried out a second joint round of strikes on Houthi positions in Yemen.