Oil Falls Slowly, Market Eyes Supply Overflow
Oil prices continued to weaken as market participants focused more on the prospect of tighter supply, although the winter storm in the US remained a concern.
On Tuesday, WTI fell around 0.6% to $60.28 per barrel, while Brent weakened 0.7% to around $65.15. The pressure came as the market assessed a rapid recovery in supply.
From Kazakhstan, production at the giant Tengiz field was reportedly gradually recovering after an outage, signaling additional supply to the market. At the same time, efforts were underway to bring more Venezuelan oil to a market already considered quite full.
In the US, freezing temperatures briefly disrupted several refineries on the Gulf Coast. However, the market viewed the impact as likely temporary, disrupting logistics and refinery operations more than permanently damaging demand.
From OPEC+, eight key producers are scheduled to meet on February 1, and Reuters sources said they are likely to maintain production increases for the next period. This helped stem further declines, but was not enough to reverse the trend when non-OPEC+ supply improved.
Meanwhile, geopolitical factors still leave a "risk premium" after Trump again highlighted Iran and the US sent military assets to the Middle East. However, today, the market appears more concerned about a supply glut than a supply shortage.
Key point (5):
- Oil fell as the market focused on the potential supply glut.
- WTI and Brent both weakened in the latest session.
- Tengiz production is recovering, increasing supply.
- A US hurricane disrupted refineries, but the impact is expected to be short-lived.
- OPEC+ tends to maintain production, while the risk of Iran remains a source of volatility. (asd)
Source: Newsmaker.id
