On Tuesday, WTI crude oil futures decreased to $68.5 per barrel after a 3.2% increase on Monday. The main reason for the price decline was that Norway’s Johan Sverdrup oilfield began producing oil again, at least partially, which reduced earlier worries about supply shortages. Equinor, the company operating this large oilfield in Western Europe, restarted some output after fixing a power outage.
Chevron’s Kazakhstan Oilfield Production Down by 30%
However, not all supply issues are resolved. Repairs are still ongoing at Kazakhstan’s Tengiz oilfield, which Chevron runs. This means global oil supplies are still somewhat limited. According to Kazakhstan’s energy ministry, the Tengiz field is producing 28% to 30% less oil than usual, and repairs are expected to be finished by Saturday.
Meanwhile, other factors also affect oil prices. There are signs that demand for oil in China is weakening. Additionally, the International Energy Agency has predicted that there could be a global surplus of oil next year. If OPEC+ decides to increase production, the risk of surplus becomes even greater.
On the other hand, rising tensions in the Russia-Ukraine conflict are preventing oil prices from dropping more. Russia recently conducted its largest airstrike in months, which adds uncertainty to the market and supports oil prices.