Oil prices climbed as traders assessed the impact of supply disruptions in the Black Sea region and market volatility stemming from former U.S. President Trump's reported plan to acquire Greenland.
The front-month WTI contract for February delivery, which expired on Tuesday, rose 1.5%, settling above $60 per barrel. The more actively traded March contract saw a similar increase.
Supply disruptions provided support for prices, as Kazakhstan's largest oil producer recently suspended production at the Tengiz and Korolev fields following a generator fire. Reports indicated that the Tengiz field would remain shut down for an additional seven to ten days.
Kazakhstan had already reduced crude output after drone attacks impacted the loading terminal of the Caspian Pipeline Consortium (CPC) located in Russia.
"Crude is higher this morning due to ongoing concerns about CPC loadings, which remain restricted following recent attacks in Ukraine," noted Rebecca Babin, Senior Energy Trader at CIBC Private Wealth Group. "At the same time, broader geopolitical risks remain elevated, keeping traders attuned to related news."
Trump once again lashed out at allies on social media, prompting a firm response from Europe to his economic threats, which were linked to the objective of acquiring Greenland.
The escalating tensions weighed on stock markets, drove gold and silver prices to record highs, and sparked concerns about a U.S.-Europe trade war. However, the direct impact on crude oil prices has so far been more moderate.
The expiring February WTI crude contract settled 1.5% higher at $60.34 per barrel.
The more active March contract gained 1.7%, reaching $60.36 per barrel.
March Brent crude rose 1.5%, settling at $64.92 per barrel.
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