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Worries About Oil Supply From Kazakhstan, And Libyan Push Up Oil Prices

Worries About Oil Supply From Kazakhstan, And Libyan Push Up Oil Prices
On Monday, oil prices rose somewhat as supply interruptions in Kazakhstan and Libya outweighed concerns over the rapid global spread of Omicron infections.
At 0406 GMT, Brent crude was up 16 cents, or 0.2 per cent, to $81.91 a barrel, while WTI crude in the United States was up 15 cents, or 0.2 per cent, to $79.05 a barrel.
Last week, oil prices rose 5 per cent after demonstrations in Kazakhstan disrupted train lines, and halted production at the country's major oilfield, Tengiz, and Libyan production fell to 729,000 barrels per day from 1.3 million last year due to pipeline maintenance.
Tengizchevroil (TCO), Kazakhstan's largest oil venture, is gradually increasing output at the Tengiz field to normal levels following recent protests, operator Chevron said on Sunday.
"Growing supply outages in places like Libya and others have re-centered the spotlight on supply availability," RBC Capital analysts said in a note.
According to the bank, if Russia invades Ukraine, it will impair Russian crude deliveries to Europe, driving up oil prices.
Thousands of Russian troops have collected along the Ukrainian border in preparation for an invasion, according to Washington and Kyiv, eight years after Russia annexed the Crimean peninsula from Ukraine.
Rising global demand and lower-than-expected supply additions from the Organization of the Petroleum Exporting Countries, Russia, and allies, or OPEC+, are also helping oil.
OPEC output increased by 70,000 barrels per day in December, compared to the 253,000 barrels per day allowed under the OPEC+ supply agreement, which restored output slashed in 2020 when demand collapsed because of COVID-19 lockdowns.
Following two back to back years of decreases, US energy companies began the current New Year by continuing to add oil and natural gas rigs to increase output.
The oil and gas rig count, a leading indicator of future output of oil, increased by two to 588 in the week ending January 7, which marked the highest level for such assets since April 2020, according to Baker Hughes Co, an energy services business.
As a result of the highly transmissible Omicron variant of the coronavirus, countries from Europe to China and India have implemented various restrictions.
In the United States, employment increased less than predicted in December due to labor shortages, and job increases are likely to remain modest in the near future as Covid-19 infections spiral out of control.

Christopher J. Mitchell

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