Investing.com — Oil prices edged higher on Tuesday as traders weighed the restart of production at a key Norwegian oil field and an escalation in geopolitical tensions after Russia adjusted its nuclear threat threshold.
At 2:30 PM ET (1935 GMT), the price rose 0.2% to $73.43 per barrel, while adding 0.3% to settle at $69.33 per barrel.
Russia is increasing the nuclear threat
Crude oil prices rose about 3% on Monday, recovering from a near three-week low on Monday after Equinor (NYSE:) said it would cut production from its Johan Sverdrup oil field in Norway, the largest oil field in Western Europe , had stopped.
In addition, Kazakhstan’s largest oil field, Tengiz, cut oil production by 28% to 30% for repairs expected to be completed on Saturday, the country’s energy ministry said.
The partial restart of the Johan Sverdrup field earlier Tuesday has eased supply concerns in the region, while an escalation of geopolitical tensions between Russia and the West has provided some support.
Russian President Vladimir Putin lowered the threshold for a nuclear strike earlier Tuesday, just days after the White House reportedly allowed Ukraine to fire U.S. missiles deep into Russia.
The updated Russian nuclear doctrine, which outlines a framework for the conditions under which Putin could order an attack, now states that Russia could consider a nuclear strike in response to a conventional attack on Russia or ally Belarus that “posed a critical threat for their country’. sovereignty and (or) their territorial integrity”.
Ukraine has steadily attacked Russia’s oil infrastructure throughout the conflict. And while it has had little impact on Moscow’s oil exports, the use of U.S. missiles could more easily threaten Moscow’s production.
Chinese demand, oversupply fears oil pressure
Oil prices posted some losses from last week, mainly hit by concerns about slowing demand from top importer China. A slew of recent stimulus measures from the country have largely disappointed traders, especially given that recent economic developments have shown little improvement.
Oil was also hit by fears of a potential market glut in 2025, due to increased production outside the Organization of the Petroleum Exporting Countries and allies. US production remained near record highs of more than 13 million barrels per day.
“Globally, our balance sheet shows that the market will be in surplus through 2025,” ING analysts said in a note. “However, the size of the surplus depends on what OPEC+ decides to do when it comes to next year’s production policy. The group will likely decide on this at their next meeting on December 1.”
The report will release its forecast for US crude inventories later in the session, with a small increase expected.
(Peter Nurse, Ambar Warrick contributed to this article.)
