Oil Prices Dip as Norway’s Johan Sverdrup Resumes Production Amid Global Developments

Oil prices fell marginally on Tuesday as Norway’s oilfield restarted production and plans by Iran to cap its uranium stockpile offsetting concerns about escalation of the Russia-Ukraine war.

Brent crude futures fell 0.1 percent or 7 cents, to $73.23 per barrel while the US West Texas Intermediate (WTI) crude futures gained 0.1 percent 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 to 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.

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 after Ukraine used US missiles to strike Russian territory on Tuesday after President Joe Biden gave the green light.

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.

Official data from the US Energy Information Agency (EIA) will be released later on Wednesday.