NEW YORK: Oil prices rose on Wednesday as investors assessed a temporary shutdown at two large fields in Kazakhstan, expectations of a build in US crude inventories and fresh geopolitical tension tied to US tariff threats in its bid to gain control of Greenland. Brent futures gained 11 cents, or 0.2percent, to USD65.03 a barrel at 1343 GMT.
The US West Texas Intermediate crude contract rose 14 cents, also 0.2percent, to USD60.50 a barrel. Both contracts closed about 1.5percent higher in the previous session after OPEC+ producer Kazakhstan halted output at the Tengiz and Korolev oilfields on Sunday due to power distribution issues.
Elsewhere in the country, oil from the Kashagan field has been diverted to the domestic market for the first time due to bottlenecks at the Black Sea CPC terminal, four industry sources told Reuters on Wednesday after equipment at the terminal was seriously damaged in drone attacks.
Reuters reported on Wednesday that the operator of the Tengiz oilfield, TCO, has declared force majeure on crude oil deliveries into the CPC pipeline system, citing a TCO letter.
Oil production at the two Kazakh fields could be halted for another seven to 10 days, Reuters reported on Tuesday, citing three industry sources. Limiting oil market gains, US President Donald Trump said on Tuesday there was “no going back” on his goal to control Greenland. Last week he vowed to implement a wave of increasing tariffs on European allies until the US is allowed to buy the Arctic island. The increased geopolitical tensions, which add pressure to the oil markets as tariffs could slow economic growth, prompted risk-off sentiment, said UBS analyst Giovanni Staunovo.
US crude oil and gasoline stockpiles were expected to have risen about 1.7 million barrels last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Tuesday.
The American Petroleum Institute weekly inventory data is due at 4:30 p.m. EST (2130 GMT) on Wednesday, and government figures are due at 12 p.m. EST (1700 GMT) on Thursday, both a day later due to a US federal holiday on Monday.
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