After recent crude trading sessions that were driven mainly by worry about waning demand, Tuesday's session saw a sudden and ironic flip – accompanied by a significant jump in prices – to supply concerns as output from the largest Kazakhstan oilfields were reportedly down by half.
Brent settled up $1.70 at $81.68 per barrel, and West Texas Intermediate settled up $1.55 at $76.41 per barrel.
A storm in the Black Sea region disrupted up to 2 million barrels per day (bpd) of oil exports from Kazakhtsan and Russia, and Kazakhstan's Tengiz, Kashagan, and Karachaganak oilfields cut
their combined output by 56 percent as loadings are disrupted.
The Kazakh energy ministry said the declines will worsen by Dec. 3, due to the Tengiz field halting production and the country's total output decreasing by 126,000 tons per day; meanwhile, Russia's Novorossiysk port (the largest Black Sea outlet for oil and products) remained closed on Tuesday.
Adding to supply worries was the U.S., whose analytical body predicted that the latest round of weekly inventory data will show crude stocks falling by about 2 million barrels.
Also weighing on trading sentiment was Thursday's meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, to discuss 2024 production targets; due to internal disagreements, the cartel is expected to extend existing output cuts rather than deepen them.
Carsten Fritsch, commodity analyst at Commerzbank, said, "According to delegates, Saudi Arabia is demanding lower production quotas from the other OPEC+ countries; while Kuwait has signalled that it would be willing to do so, some countries are apparently resisting any such move."
Optimism was further stoked by Christopher Waller, governor of the U.S. Federal Reserve, who told media on Tuesday that he's "increasingly confident" that monetary policy is tight enough to reduce inflation.
In other oil news on Tuesday, Bloomberg reported that India is debating whether to allow a now-sanctioned tanker carrying Russian oil to dock at one of its ports, which is supposedly a signal that sanctions on Russia's crude trade could limit India's ability to buy and import cheaper oil.
The Aframax vessel has been floating for 10 days 1,600 miles off the port of Vadinar, where it was scheduled to deliver its cargo of Russia's Sokol grade.