Oil prices steady as end of European outages counters US disruption

LONDON: Oil prices steadied on Monday after climbing more than 2 percent in the previous session on output disruptions in US crude-producing regions and tensions between the US and Iran.

Brent crude futures dipped 7 cents, or 0.1 percent, to USD65.81 a barrel by 1251 GMT. US West Texas Intermediate crude was down 13 cents, or 0.2percent, at USD60.94. Both benchmarks notched weekly gains of 2.7percent to close on Friday at their highest since January 14.

Kazakhstan is poised to resume production at its biggest oilfield, the energy ministry said on Monday, but industry sources said volumes were still low and a force majeure on CPC Blend exports was still in place.

The Caspian Pipeline Consortium (CPC), which operates Kazakhstan’s main exporting pipeline, said on Sunday that its Black Sea terminal had returned to full loading capacity after maintenance was completed at one of its three mooring points.

“Winter storm Fern struck the US coast, forcing shut-ins in major crude and natural gas producing regions and adding stress to the power grid,” said Priyanka Sachdeva, senior market analyst at Phillip Nova, adding that oil markets are experiencing a mild upswing as outages tighten physical flows.

About 250,000 barrels per day of crude production has been lost in the US due to harsh weather, including declines in the Bakken field in Oklahoma and parts of Texas, JPMorgan analysts said on Monday. Traders were also wary of geopolitical risks, analysts said, as tensions between the US and Iran kept investors on edge.

US President Donald Trump said last week that the US has an “armada” heading toward Iran but hoped he would not have to use it, renewing warnings to Tehran against killing protesters or restarting its nuclear programme.

“Unusually cold US winter weather with higher heating oil demand and likely US oil supply outages was probably part of the bullish drive at the end of last week, but US threats towards Iran with USS Abraham Lincoln being deployed to the Middle East was probably more important,” an SEB research note said on Monday.

On Friday, a senior Iranian official said Iran would treat any attack “as an all-out war against us”.