Oil price rises as Kazakh unrest worsens supply problems

Oil tankers are seen parked in a yard outside a fuel depot on the outskirts of Calcutta on February 3, 2015. REUTERS / Rupak De Chowdhuri / File Photo

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LONDON, Jan. 7 (Reuters) – Oil prices rose and were heading for their biggest weekly increases since mid-December on Friday as unrest in Kazakhstan and blackouts in Libya raised supply concerns.

Brent crude climbed 70 cents, or 0.9%, to $ 82.69 a barrel at 1229 GMT. U.S. West Texas Intermediate (WTI) crude rose 59 cents, or 0.7%, to $ 80.05 a barrel.

Brent and WTI were on track for gains of nearly 6.5% in the first week of the year, with prices at their highest since late November, as concerns over supply grew. overtaken fears that the rapid spread of the Omicron coronavirus variant will hurt demand.

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“The rise in oil prices mainly reflects market nervousness as unrest escalates in Kazakhstan and the political situation in Libya continues to deteriorate and sideline oil production,” said Louise Dickson , analyst at Rystad Energy.

Security forces appeared to be controlling the streets of Kazakhstan’s main city, Almaty, on Friday, and the president said constitutional order was largely restored, a day after Russia sent troops to quell an uprising . Read more

Protests began in the oil-rich western regions of Kazakhstan after the state’s price caps for butane and propane were lifted on New Year’s Day.

Oil production from Kazakhstan’s largest field, Tengiz, was curtailed on Thursday, its operator Chevron (CVX.N) said, as some contractors disrupted train lines in support of protests in the country. ‘Central Asia. Read more

Meanwhile, the additions of offers from the Organization of the Petroleum Exporting Countries, Russia and their allies, collectively called OPEC +, are not keeping up with the growth in demand.

OPEC production in December was up 70,000 barrels per day from the previous month, compared to the 253,000 b / d increase allowed under the OPEC + supply agreement, which has restored production which was cut back in 2020 when demand collapsed under COVID-19 lockdowns.

Production in Libya fell to 729,000 barrels per day from 1.3 million barrels per day last year, in part due to pipeline maintenance work.

As the Omicron coronavirus variant sets in quickly, concerns on the demand side are easing amid mounting evidence that it is less severe than previous variants.

“Concerns about a massive drop in demand for oil have faded now that it has become clear that Omicron causes milder forms of the disease than previous variants of the virus, meaning massive restrictions on mobility won’t are not likely, ”Commerzbank analyst Carsten Fritsch said.

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Reporting by Bozorgmehr Sharafedin in London, additional reporting by Sonali Paul in Melbourne and Muyu Xu in Beijing; Editing by Gerry Doyle, Himani Sarkar and Alexander Smith

Our Standards: Thomson Reuters Trust Principles.

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