Oil futures: Crude extends gains on heightened Russia tensions
Quantum Commodity Intelligence – Crude futures Tuesday were were nudging higher as the spike in geopolitical tensions outweighed the production restart from a major North Sea oil field.
Front-month Jan25 ICE Brent futures were trading at $73.49/b (2030 GMT), compared to Monday's settle of $73.30/b, which had marked a 3% gain.
At the same time Dec24 NYMEX WTI was trading at $69.65/b, versus Monday's settle of $69.16/b, while the more-liquid Jan25 contract was trading at $69.43/b.
Crude prices bounced off monthly lows at the start of the week after the Biden administration gave the green light for Ukraine to strike inside Russia with long-range US missiles, prompting a furious reaction from Moscow.
Although Russia's President Putin has not directly responded, his spokesman said on Monday that the US was "adding fuel to the fire," while local media reports suggested that Moscow could supply missiles to Houthi rebels in response.
According to the New York Times, Ukraine fired a first US-made ballistic missile at Russian targets earlier Tuesday, citing a Ukrainian official and Russian reports, but the claims had yet to be verified by the US.
The UK is also set to supply Storm Shadow missiles for use on targets inside Russia after PM Keir Starmer said the UK recognised that it needed to "double down" on its support for Ukraine.
Production
Prices had rebounded after Equinor halted production at its giant Johan Sverdrup oilfield, which yields over 700,000 bpd. However, the power outage that triggered the shutdown was quickly resolved and output was back to around two-thirds of capacity by Tuesday.
Elsewhere, Kazakhstan's Tengiz field has been forced to reduce output by around 30% for what was described as ongoing repairs, although the country's largest production system underwent full maintenance during August.
Despite the rebound, crude prices remain at the bottom end of the post-Covid trading range, prompting speculation that OPEC+ could again postpone plans to start unwinding voluntary output cuts from January.
