Shafaq News
Oil prices fell on Wednesday as an expected build-up of U.S. crude inventories outweighed a temporary halt in output at two large fields in Kazakhstan and geopolitical pressure from U.S. threats of tariffs over its bid to gain control of Greenland.
Brent futures fell 76 cents, or 1.2%, to $64.16 a barrel at 0445 GMT. The U.S. West Texas Intermediate crude contract lost 60 cents, or 1%, to trade at $59.76 a barrel.
Both contracts closed nearly $1 a barrel or 1.5% higher in the previous session after OPEC+ producer Kazakhstan halted output at the Tengiz and Korolev oilfields on Sunday due to power distribution issues. Strong China economic data was also positive.
Oil production at the two Kazakh fields could be halted for another seven to 10 days, three industry sources told Reuters.
The oil output halt at Tengiz, one of the world's largest oil fields, and Korolev is temporary, and downward pressure from an expected rise in U.S. crude inventories along with geopolitical tension will persist, IG market analyst Tony Sycamore said on Wednesday.
U.S. President Donald Trump's promise of fresh tariffs on European nations if no deal for the U.S. to gain control of Greenland was reached is adding pressure to the oil markets because the tariffs risk slowing economic growth.
Trump said on Tuesday there was "no going back" on his goal to control Greenland.
U.S. crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Tuesday.
Six analysts polled by Reuters estimated on average that crude inventories rose by about 1.7 million barrels in the week to January 16.
The American Petroleum Institute weekly inventory data is due at 4:30 p.m. EST (2130 GMT) on Wednesday, and the Energy Information Administration, the statistical arm of the U.S. Department of Energy, at 12 p.m. EST (1700 GMT) on Thursday, both a day later due to a U.S. federal holiday on Monday.
While that inventory growth would be negative for oil prices, Gregory Brew, senior analyst with the Eurasia Group consultancy, said the potential for U.S.-Iran tensions to re-escalate would help elevate oil prices.
Trump threatened to strike Iran over its violent crackdown on anti-government protests earlier this month.
Any attack on Iranian Supreme Leader Ayatollah Ali Khamenei would trigger a declaration of jihad, or holy war, the Iranian Students News Agency quoted Iran's national security parliamentary commission as saying on Tuesday.
"While the U.S. demurred from striking Iran immediately, tensions are likely to remain high as additional U.S. military assets move to the Middle East and diplomacy to de-escalate tensions fails to make progress," Brew said in a note.
Reuters
Only the headline is edited by Shafaq News.