Jan 23, 2024: Oil prices experienced a decline on Tuesday, relinquishing early gains as concerns about increasing supply outweighed ongoing tensions in the Middle East.
As of 09:30 ET (14:30 GMT), U.S. crude futures were trading 0.7% lower at $74.22 a barrel, while the Brent contract dropped 0.7% to $79.44 a barrel.
Factors contributing to the dip included uncertainties surrounding various supply and demand indicators. Norway’s crude production, surpassing expectations at 1.85 million barrels per day in December, played a role in the market movement. This figure exceeded the 1.81 million barrels recorded in the previous month.
Additionally, production at Libya’s Sharara oilfield resumed early this week following the end of protests that had halted output since the beginning of the month.
Despite these factors, severe cold weather in the United States continued to impact supply. North Dakota’s pipeline authority estimated a daily oil production reduction of around 250-300 million barrels as of Monday.
The extreme cold weather in the U.S. also affected refining operations, with approximately 15% of refining capacity in the Gulf Coast region reported to be offline as of last Friday.