The price of Brent crude ended the week at 81.93 after closing the previous week at $77.94. The price of WTI ended the week at $78.94 after closing the previous week at $75.45. Prices of Brent crude and WTI crude both started drifting downward on Jan. 7.
Last week, the oil market was affected by supply-related developments including members of OPEC+ agreeing to maintain the monthly increases of 400,000 bbl/d in February. Oil supply, however, was negatively impacted by developments in Kazakhstan and in Libya. Oil production associated with Kazakhstan’s Tengiz Field (representing about 700,000 bbl/d of Kazakhstan’s production) was reduced on Jan. 6 because of disruptions caused by contractors in support of the protests stemming from increased fuel prices. Libya’s oil production was reduced by another 200,000 bbl/d because of a pipeline issue, which added to the more than 300,000 bbl/d production loss associated with four oil fields that started in mid- December of last year. As a result, Libya’s, oil production has declined to 729,000 bbl/d, (according to the National Oil Corp.), from around 1.2 million bbl/d. While it appears the pipeline issue is being resolved, the other production losses are still in effect.
The oil market is also being affected by geopolitical developments including those involving Russia, macroeconomics as well as concern about central bankers increasing interest rates.