Oil Dips As U.S. Storms Eclipse Rapidly-Escalating Iran Hostilities

Meanwhile, Baker Hughes looks favourably upon Venezuela's reviving oil sector: File Image/Pixabay

Crude output impact due to the winter storms ravaging Eastern U.S. states was the main reason why oil prices took a dip on Monday, after climbing in the previous session by more than 2 percent.

Analysts estimated that the blizzards caused a loss of up to 2 million barrels per day (bpd) over the weekend, 1.5 million of that figure coming from the Permian Basin.

Even though production outages eased by Monday, Brent settled down 29 cents at $65.59 per barrel; West Texas Intermediate settled down 44 cents at $60.63.

The storms temporarily eclipsed on-going concerns about tensions between the U.S. and Iran; oil trading was boosted last week by U.S. president Donald Trump sending a seaborne "armada" to the Middle East and renewed warnings to Tehran against killing protesters or restarting its nuclear programme.

In response, a senior Iranian official said any attack would be regarded "as an all-out war against us;" and Iran's supreme leader Ayatollah Ali Khamenei reportedly went underground.

Dennis Kissler, senior vice president of trading at BOK Financial, said, "Crude remains in a holding type trade pattern until more is known about how the Trump administration will handle Iran."

Meanwhile, Monday's oil trading was said to also have been influenced by Kazakhstan, where the Caspian Pipeline Consortium announced that its Black Sea terminal had resumed normal operations following repairs at a mooring point; this assuaged earlier concerns that Kazakhstan's crude output may average only about 1 million bpd this month compared with a usual level of 1.8 million bpd.

In other oil news on Monday, Lorenzo Simonelli, CEO of Baker Hughes, suggested that a significant revenue opportunity exists in Venezuela as operators prepare for a recovery in drilling, production maintenance, and infrastructure work.

He said during an earnings call that moderate production increases will require substantial investment but that "The incremental opportunity of revenue is significant, and will be obviously programmatic as we go back, and there's a lot of work in progress."