Investing.com-- Oil prices fell slightly in early Asian trade on Tuesday, steadying after clocking sharp gains in the prior session on production disruptions in Norway and an escalation in the Russia-Ukraine war.
Prices had rebounded from near three-week lows on Monday, seeing some elements of bargain buying as well after recent losses. But a bleak outlook for global demand and a potential supply glut limited oil’s rally.
Brent oil futures expiring in January fell 0.2% to $73.19 a barrel, while West Texas Intermediate crude futures fell 0.1% to $69.07 a barrel by 20:08 ET (01:08 GMT) .
Oil rises sharply on Norway disruptions
Oil prices surged over 3% on Monday after Equinor (NYSE:EQNR) said it had halted production at its Johan Sverdrup oilfield in Norway.
The field is the biggest oilfield in Western Europe, and an outage presents some uncertainty over oil supplies in the region.
Equinor said work was halted due to an onshore power outage, and it was not immediately clear when output would resume.
Sverdrup produced about 755,000 barrels of oil equivalent per day as of October. But production is expected to fall from current peaks by early next year.
Russia-Ukraine escalation buoys oil
An escalation in the Russia-Ukraine war saw traders pricing in a greater risk premium into crude, after the Joe Biden administration allowed Ukraine to use U.S.-made weapons to strike targets in Russia.
The Kremlin bashed the move, having earlier warned that such a move could lead to a confrontation with the NATO alliance.
Ukraine has steadily attacked Russia’s oil infrastructure, although this trend has so far had little impact on Moscow’s oil exports. But traders fear that more attacks on oil infrastructure could threaten Moscow’s output.
China demand, oversupply fears pressure oil
Oil prices were nursing some losses from last week, hit chiefly by concerns over slowing demand in top importer China. A slew of recent stimulus measures from the country largely underwhelmed traders, especially given that recent economic prints showed little improvement.
Oil was also hit by fears of a potential market glut in 2025, on increased production outside the Organization of Petroleum Exporting Countries and allies. Production in the U.S. remained close to record highs above 13 million barrels per day.