Oil prices settled slightly lower on Monday as investors assessed the impact on output in crude-producing regions in the United States from winter storms and the impact of any tensions between the US and Iran.
Brent crude futures depleted by 29 cents or 0.4 per cent to sell at $65.59 a barrel and the US West Texas Intermediate (WTI) crude futures decreased by 44 cents or 0.7 per cent to $60.63 per barrel.
US oil producers lost up to 2 million barrels per day or roughly 15 per cent of national production over the weekend as a winter storm swept across the country, straining energy infrastructure and power grids.
The occurrence which peaked on Saturday eased on Monday with Reuters reporting that Permian shut-ins were estimated at about 700,000 barrels per day from 1.5 million barrels per day and production set to be fully restored by January 30. There were around two dozen reports of upsets at natural gas processing plants and compressor stations in Texas, according to regulatory filings over the weekend.
Meanwhile, Kazakhstan is poised to resume production at its biggest oilfield, the energy ministry said on Monday. The Caspian Pipeline Consortium, which operates Kazakhstan’s main exporting pipeline, said on Sunday that its Black Sea terminal had returned to full loading capacity after maintenance was completed at one of its three mooring points.
The market continue to weigh tensions between the US and Iran with the US sending an armada toward Iran but President Donald Trump said he hoped he would not have to use it, renewing warnings to Iran against killing protesters or restarting its nuclear programme.
Iran, which is a top producer in the Organisation of the Petroleum Exporting Countries (OPEC), said it would treat any attack “as an all-out war against us”.
OPEC and allies (OPEC+) is expected to hold oil production flat in March and reiterate the first-quarter pause in supply hikes when the group meets on February 1 to discuss output level.
The group has not yet held discussions ahead of next Sunday’s online meeting, but it does not see any need of changing the policy despite the expected oversupply and the geopolitical developments that could influence supply from OPEC members Iran and Venezuela.
Early this month, the eight OPEC+ members that have been implementing cuts since 2023 – Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman – reaffirmed the decision to pause monthly increments during the first quarter of the year.
Bloomberg cited OPEC+ delegates sources saying that there is no indication that the February meeting would change that course.