Key Moments
- Brent traded at $64.16 a barrel and WTI at $59.76, both retreating after earlier gains.
- Kazakhstan halted output at the Tengiz and Korolev fields, with outages lasting up to 10 days.
- Analysts expect U.S. crude inventories to rise by roughly 1.7 million barrels.
Prices Ease After Tuesday’s Rally
Oil futures slipped on Wednesday. Expectations for higher U.S. crude inventories outweighed a temporary supply disruption in Kazakhstan. As a result, prices gave back part of Tuesday’s gains.
By 0445 GMT, Brent crude fell 76 cents, or 1.2%, to $64.16 per barrel. Meanwhile, U.S. West Texas Intermediate dropped 60 cents, or 1%, to $59.76.
Both benchmarks had climbed nearly $1, or about 1.5%, in the previous session. Those gains followed Kazakhstan’s decision to halt production at the Tengiz and Korolev fields on Sunday. In addition, strong economic data from China supported prices.
| Contract | Price | Move | Percent Change | Time (GMT) |
|---|---|---|---|---|
| Brent | $64.16 | – $0.76 | – 1.2% | 0445 |
| WTI | $59.76 | – $0.60 | – 1.0% | 0445 |
Kazakh Supply Halt Seen as Short-Lived
Industry sources told Reuters that production at Tengiz and Korolev could stay offline for seven to 10 days. Tengiz ranks among the world’s largest oil fields.
However, IG market analyst Tony Sycamore said the outage should remain temporary. He added that traders continue to focus on rising U.S. inventories. Geopolitical risks also remain in play.
Tariff Threats Add to Market Uncertainty
Meanwhile, geopolitical tensions added fresh uncertainty. President Donald Trump threatened new tariffs on European nations if talks over U.S. control of Greenland fail.
On Tuesday, Trump said there was “no going back” on his objective. As a result, markets grew more cautious about global growth prospects.
Inventory Data Takes Center Stage
Attention now turns to U.S. inventory reports. A preliminary Reuters poll showed expectations for higher crude and gasoline stocks last week. In contrast, analysts see distillate inventories falling.
Six analysts forecast an average crude build of about 1.7 million barrels for the week ending January 16.
The American Petroleum Institute releases its weekly data at 4:30 p.m. EST on Wednesday. The Energy Information Administration follows on Thursday at 12 p.m. EST. Both reports arrive a day late due to Monday’s U.S. federal holiday.
Middle East Risks Offer Price Support
Despite inventory pressure, tensions in the Middle East continue to support prices. In particular, analysts remain alert to renewed friction between the United States and Iran.
Gregory Brew of Eurasia Group said the risk of escalation could keep oil prices elevated. Earlier this month, Trump threatened military action against Iran over its response to protests.
Iranian officials warned that any attack on Supreme Leader Ayatollah Ali Khamenei would trigger a declaration of jihad. As a result, traders continue to price in a modest geopolitical premium.
“While the U.S. stopped short of immediate action, tensions are likely to stay high,” Brew said. He noted increased U.S. military activity and stalled diplomacy in the region.
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