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Oil futures ended higher Thursday, building on a strong start to 2022, as traders worried about unrest in Kazakhstan and production outages in Libya.
Dozens of people were killed in Kazakhstan on Thursday as authorities responded to countrywide protests over soaring fuel prices. A Russian-led military alliance, the Collective Security Treaty Organization, said early Thursday that it would send peacekeeper troops to Kazakhstan at the request of President Kassym-Jomart Tokayev.
The situation in Kazakhstan “is becoming increasingly tense. And this is a country that is currently producing 1.6 million barrels of oil per day,” said Barbara Lambrecht, commodity analyst at Commerzbank, in a note.
The protests in Kazakhstan, which have spread to the oil city hubs in the western part of the country, haven’t yet affected production at the 650,000 barrel-a-day Tengiz field, noted Louise Dickson, senior oil markets analyst at Rystad Energy. But Chevron previously announced a temporary adjustment to output due to logistics, she said. The involvement of Russian troops could also further stoke unrest.
“The upward jump in oil prices mostly reflects the market jitters as unrest escalates in Kazakhstan and the political situation in Libya continues to deteriorate and sideline oil output,” she said in a note.
West Texas Intermediate crude for February delivery
CL00,
CLG22,
rose $1.61, or 2.1%, to close at $79.46 a barrel on the New York Mercantile Exchange, after trading above $80 a barrel for the first time since Nov. 17. March Brent crude
BRN00,
BRNH22,
the global benchmark, finished with a gain of $1.19, or 1.5%, to $81.99 a barrel on ICE Futures Europe. WTI saw its highest close since Nov. 16, while and Brent posted its highest close since Nov. 25.
Libya on Monday said it expected output to fall by another 200,000 barrels a day this week as workers attempt to fix a damaged pipeline, news reports said. Combined with oil field outages, Libyan output is seen down by more than 500,000 barrels a day.
February natural-gas futures
NGG22,
fell 1.8% to $3.8120 per million British thermal units.
The Energy Information Administration said natural gas in storage last week saw a withdrawal of 31 billion cubic feet. Analysts surveyed by S&P Global Platts, on average, had expected a withdrawal of 50 billion cubic feet.
The five-year average withdrawal for this time of year is 108 billion cubic feet, noted Christin Redmond, commodity analyst at Schneider Electric, in a note.
Redmond also noted that NOAA’s 8- to 14-day forecast shows colder temperatures dissipating from the Northeast with relatively normal temperatures settling in, while warmer temperatures remain across most of the rest of the U.S. “These conditions will likely reduce heating demand, and help keep pressure on gas prices,” Redmond said.
February gasoline futures
RBG22,
rose 0.5% to end at $2.3043 a gallon, while February heating-oil futures
HOG22,
finished at $2.4777 a gallon, up 1.3%.
