By Shariq Khan
NEW YORK (Reuters) -Oil prices were largely unchanged on Tuesday as signs of escalation in the war between Russia and Ukraine kept investors wary of supply disruptions but limited the partial restart of production at Norway’s Johan Sverdrup oil field the profits.
futures rose a cent to settle at $73.31 a barrel. U.S. West Texas Intermediate crude futures rose 0.3%, or 23 cents, to close at $69.39 a barrel.
Ukraine used US ATACMS missiles to attack Russian territory for the first time on Tuesday, Moscow said. Russian Foreign Minister Sergei Lavrov called the attack a Western escalation. Russian President Vladimir Putin has lowered the threshold for a possible nuclear attack.
“This marks a renewed build-up of tensions in the war between Russia and Ukraine and brings renewed attention to the risk of supply disruptions in the oil market,” said ANZ Bank analyst Daniel Hynes.
Market watchers also pointed to signs of higher crude oil purchases by top importer China. China’s crude oil imports are on track to be at or near record highs by the end of November, StoneX energy analyst Alex Hodes said, citing data from ship tracker Kpler.
China’s weak imports so far this year have weighed heavily on oil prices, sending Brent futures down 20% from their April peak of more than $92 a barrel. Chinese crude oil imports fell for the sixth month in a row in October compared to a year earlier.
China likely increased oil purchases this month because current prices offer relatively good value, Hodes said.
To limit oil’s rise, Equinor resumed partial production from the North Sea’s Johan Sverdrup field, Western Europe’s largest oil field, the day after a power outage there contributed to a 3% rise in oil price benchmarks.
The restart and a stronger U.S. dollar weighed on market sentiment on Tuesday, UBS analyst Giovanni Staunovo said.
Oil prices also came under pressure after confidential reports from the U.N. nuclear watchdog seen by Reuters said Iran has offered to stop expanding its stockpile of uranium enriched to 60% purity, close to roughly 90% of weapon quality.
Oil inventories rose by 4.75 million barrels in the week ended Nov. 15, market sources said on Tuesday, citing figures from the American Petroleum Institute.
Analysts polled by Reuters expect lower production of about 100,000 barrels on average. The U.S. Energy Information Administration is expected to report official stockpile data at 10:30 a.m. EST on Wednesday.
