By Adedapo Adesanya
Crude oil marginally depreciated on Tuesday as Norway’s oilfield restarted production, with plans by Iran to cap its uranium stockpile offsetting concerns about escalation of the Russia-Ukraine war.
The price of Brent crude went down by 0.1 per cent or 7 cents to $73.23 per barrel and the US West Texas Intermediate (WTI) crude declined by 0.1 per cent or 5 cents to $69.21 per barrel.
Equinor resumed partial production from the Johan Sverdrup field in the North Sea, Western Europe’s largest oilfield, the day after a power outage saw prices rise by 3 per cent. The power outage was caused by overheating in an electrical converter station at Kaarstoe in south-west Norway.
By Tuesday, over 60 per cent of the capacity had been returned and there are expectations that this will be finished by Wednesday.
Prices were also weakened by a stronger US Dollar as the American currency edged up to within striking distance of its one-year high.
A strong dollar makes oil more expensive for other currency holders.
Meanwhile, Iran has offered to stop expanding its stock of uranium enriched to 60 per cent purity, near the roughly 90 per cent of weapons-grade.
The aim is to get Iran to return to the negotiating table and agree with fresh restrictions on its nuclear activities since a 2015 deal with far-ranging curbs fell apart.
US President-elect Donald Trump who takes office in January pulled the US out of the nuclear deal in 2018, which prompted its unravelling.
As he returns to the White House, it is unclear if he would back talks with Iran, having pledged instead to again take a more confrontational approach and align the US even more closely with Iran’s arch-rival Israel, which opposed the deal.
Oil prices drew some support from an ongoing outage at Kazakhstan’s biggest oilfield, Tengiz, which has reduced output by around 30 per cent for repairs which the country’s energy ministry has said will be completed by Saturday.
Rising tensions between Russia and the US over Ukraine also supported the oil market.
Ukraine used US missiles to strike Russian territory on Tuesday after President Joe Biden gave the green light.
In response, Russian foreign minister Sergei Lavrov described the attack as a Western escalation.
Meanwhile, crude oil inventories in the US rose by 4.753 million barrels for the week ending November 8, according to the American Petroleum Institute (API). For the week prior, the API reported a 777,000 barrel draw in crude inventories.
So far this year, crude oil inventories have risen by less than 1 million barrels since the beginning of the year, according to API data.
Official data from the US Energy Information Agency (EIA) will be released later on Wednesday.