Oil prices edged lower on Tuesday as investors monitored signs of a resumption in crude supply from Kazakhstan, although losses were capped by a massive winter storm that disrupted production and refinery operations along the U.S. Gulf Coast.
Brent crude futures fell 44 cents, or 0.7 per cent, to $65.15 a barrel as of 0440 GMT. U.S. West Texas Intermediate (WTI) crude was down 35 cents, or 0.6 per cent, at $60.28 a barrel.
Kazakhstan is expected to resume production at its largest oil field, according to the country’s energy ministry on Monday. However, industry sources noted that output volumes remain low for now, suggesting a gradual rather than immediate return to normal supply levels.
In addition, the Caspian Pipeline Consortium (CPC), which operates Kazakhstan’s main crude export pipeline, said it has restored full loading capacity at its terminal on Russia’s Black Sea coast. The move follows the completion of maintenance work at one of the terminal’s three mooring points.
Analysts said a sustained recovery in exports could ease near-term supply tightness. “A recovery in these flows should improve availability in the prompt market, putting some pressure on the Brent prompt spread, which has strengthened significantly through January,” ING commodities strategists said in a note.
They added that the recent strength in oil timespreads appears inconsistent with broader market expectations. “The strength in timespreads has been at odds with estimates for a large oil surplus,” ING said.
Meanwhile, weather-related disruptions in the United States provided some support to prices, as the winter storm curtailed crude production and affected refinery operations, limiting the extent of the market’s decline.
