Oil prices rise cautiously amid anticipation of Kazakhstan's return to supply and global supply tensions
Oil prices fell slightly at the start of trading on Tuesday, as investors awaited developments in global supplies and the possibility of Kazakhstan, Central Asia's largest crude producer, resuming oil production.
Despite this decline, losses remained limited due to the impact of a powerful winter storm that hit the United States, disrupting much of crude oil production and refineries, especially on the Gulf Coast, leading to a rebound.
Current price movements
West Texas Intermediate (WTI) crude is currently trading near $60.70 per barrel, while Brent crude has stabilized at around $65 per barrel, with caution continuing to prevail in the markets.
Kazakhstan puts pressure on prices
The Kazakh Energy Ministry announced on Monday that the country is close to resuming production at its largest oil fields after a partial shutdown in recent months.
However, industry sources said that production levels remain below maximum capacity, indicating that a full recovery could take longer.
Analysts believe that the resumption of Kazakh supplies could put additional pressure on oil prices in the coming period if it is not offset by strong growth in global demand.
Winter storm reduces US oil production
On the other hand, the sharp decline in US production, as a result of a severe cold wave that swept the country and affected energy infrastructure and electricity networks, limited the decline in oil prices.
Analysts and traders estimated that US oil producers lost up to 2 million barrels per day, equivalent to about 15% of total national production, over the weekend. Several oil refineries on the Gulf Coast also reported operational disruptions due to severe weather, raising concerns about potential fuel supply disruptions.
Supply shortage fears support bullish outlook
These developments could lead to a significant decline in oil inventories in the coming weeks, which could provide additional support for crude prices in the near term.
Geopolitical tensions and OPEC+ decisions
On the geopolitical front, reports indicate that a US aircraft carrier and supporting warships have arrived in the Middle East, in a move that bolsters the US military presence in the region amid ongoing tensions with Iran, a factor that increases global supply risks.
Reuters also quoted three OPEC+ delegates as saying that the group is set to maintain its decision to suspend oil production increases for March during its meeting scheduled for February 1.
Outlook
Oil prices remain hostage to a delicate balance between downward pressure factors, most notably the return of supplies, and upward support factors represented by US production disruptions, geopolitical tensions, and OPEC+ policy, keeping markets on high alert in the coming period.
