London — Oil prices eased slightly on Tuesday as traders weighed up simmering geopolitical tension in several regions with supply outages in the US and returning production in Libya.
Brent crude futures lost 31c, or 0.39%, to $79.75 a barrel by 10.19am GMT, while US West Texas Intermediate crude futures (WTI) shed 33c, or 0.44%, to $74.43 a barrel.
Brent slipped back below $80 a barrel after settling above the threshold on Monday for the first time since December 26.
Prices had risen about 2% on Monday after a Ukrainian drone strike on Novatek’s Ust-Luga Baltic fuel export terminal near Russia’s second city St Petersburg raised supply concerns.
“The attack … is a timely reminder that a bigger, more influential war is still raging on,” said PVM analyst John Evans.
Tension also rose in the Middle East, where US and British forces carried out a second joint round of strikes on Houthi positions in Yemen on Monday night.
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 January.
But the returning supply could be offset by ongoing outages in the US because of extreme cold weather. As much as 20% of North Dakota’s oil output was still shut in on Monday, the state’s pipeline authority said.
The weather-induced shutdowns over the last week could see a drop in crude inventories in Tuesday’s American Petroleum Institute (API) weekly report, PVM’s Evans added.
A Reuters poll suggested that US crude oil inventories would fall by about 3-million barrels in the week to January 19.
Reuters
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