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Oil futures were spooked on Tuesday after Libya resumed production at the country’s largest oil field as subzero temperatures across North Dakota continued to impact production.
West Texas Intermediate (CL=F) fell as much as 1% before rallying toward a flatline midday, trading above $74 a barrel. Brent futures (BZ=F) were trading around $79 a barrel after rising nearly 2% earlier.
Libya’s oil production has returned to 1.2 million barrels a day after a three-week hiatus due to protests.
Traders were also keeping an eye on Russian crude oil exports, which have been affected by recent Ukrainian drone attacks on major fuel terminals in the Baltic Sea region. The affected sites have partially resumed exports.
Meanwhile, a cold wave recently occurred across the United States, causing crude oil production of approximately 200,000 barrels per day to be halted in North Dakota.
“Still, upside potential for oil prices appears to be limited unless we see an escalation in Red Sea tensions that actually constrains oil sales,” Dennis Kistler, senior vice president at BOK Financial, said on Tuesday. Ta.
The United States and Britain continued their retaliatory strikes against Houthi-held areas in Yemen on Monday. Iranian-backed rebels have targeted ships traveling through the Red Sea, causing companies to suspend or reroute shipments away from the region.
Stephen Schwartz, Wells Fargo’s executive vice president of global receivables and trade finance, told Yahoo Finance on Monday that “disruptions in the Red Sea continue to cause the majority of ships to avoid the region, resulting in delayed delivery times. This is leading to a long-term situation.”
“The longer the disruption continues, the greater the risk of impact,” he added.
Danish oil tanker group TRMD announced earlier this month that it would suspend all shipping through the southern Red Sea. The company owns more than 80 vessels that transport refined energy products and chemicals.
British oil and gas giant Shell (SHEL) also said it would avoid the area.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X @ines_ferre.
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