Oil Mixed In Wake Of Kazakhstan Concerns And Trump's Bid For Greenland

Meanwhile, Iran admission of mass deaths could worsen hostilities with U.S.: File Image/Pixabay

Oil prices on Tuesday were mixed, driven early in the session by Kazakhstan temporarily halting output at the Tengiz and Korolev oilfields, causing concerns of shortages; and later by expectations of firmer global economic growth.

West Texas Intermediate fell 79 cents to $59.57 per barrel; Brent gained 98 cents to $64.92.

Kazakhstan had already reduced oil production after drone strikes, and the damage caused by fires to the oilfields meant that the Tengiz field may be shut for another seven to 10 days.

As for the economic growth, Tony Sycamore, market analyst at IG, reported that China's fourth quarter gross domestic quarter data was better than expected: "This resilience in ‍the world's top oil importer provided a lift to demand sentiment."

Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, said, "Broader geopolitical risks remain elevated, keeping traders focused closely on headlines."

She was referring in part to U.S. president Donald Trump's determination to annex Greenland, which has sparked ire from European leaders in support of Denmark and stoked fears of a U.S./EU trade war that could further dent oil prices.

Bloomberg noted that "Any new downward pressure on prices would add to broader concerns about crude supply outpacing demand," and added that the U.S. is scaling up its involvement in Venezuela's oil industry, thus adding to an anticipated excess of over 3.8 million barrels per day (bpd) this year.

For the record, Venezuelan National Assembly president Jorge Rodríguez on Tuesday said reforms to his country's hydrocarbons law would expand partnership-style contracts and loosen PDVSA's control over new investment; Vitol and Trafigura are already marketing Venezuelan crude under special U.S. licenses.

As for U.S./Iran tensions, they took a back seat in the minds of oil analysts on Tuesday, although the situation could soon change in the wake of Iranian supreme leader Ayatollah Ali Khamenei acknowledging for the first time that several thousand people died in his country's anti-government protests – precisely the trigger Trump warned would cause Washington to act in retaliation.