Brent ended with a loss of 1.07% to $ 80.87 and WTI ended with a decline of 0.84% to $ 78.23.
Oil prices recorded a second straight session of decline on Monday as the market released some pressure as the situation in Kazakhstan stabilized and Libyan production increased.
A barrel of Brent North Sea for delivery in March, the most traded contract in London, fell 1.07%, to close at 80.87 dollars.
In New York, a barrel of West Texas Intermediate (WTI), maturing in February, dropped 0.84% and ended at 78.23 dollars.
On Monday, the President of Kazakhstan, Kassym-Jomart Tokayev, assured that “constitutional order (had) been restored” in the country, following several days of clashes last week between demonstrators and the police.
These disturbances have left dozens of civilian deaths, even if no official report has been published other than the 16 killed within the police.
On Sunday, the American giant Chevron, which operates the country’s main deposit, Tengiz (the equivalent of more than 25 billion barrels buried underground), announced that production was gradually returning to its usual level.
The exploitation of the field had been slightly reduced by the intervention of sympathizers of the protest movement, who had disrupted the movement of trains to and from Tengiz.
In Libya, following the completion of maintenance work on an oil pipeline that links the fields of Al-Samah and Al-Dahra to Sidra, the country’s main oil terminal, national production rose by 200,000 barrels per day compared to last week, which also relieved crude prices.
“There is also the macroeconomic context in the United States, with fears regarding the trajectory of the Fed” (American central bank), underlined John Kilduff, of the investment advisory firm Again Capital.
“We have headwinds,” he added, “with the equity markets falling sharply, and this is also a factor for the demand for oil, which might end up falling as well.”
“If you remember how prices went up last week, the slack is pretty limited, knowing that the market is still supposed to be tight in the first quarter,” argued, in a note, Edward Moya, Oanda analyst.
As a result, the market is currently in a “backwardation” situation, which means that the prices on the physical market, for immediate delivery, are higher than those of the main futures contract and later maturities.
This is the result of a currently unbalanced market, with operators expecting a better match between supply and demand later in the year.
This imbalance causes stocks to fall, which supports prices, especially in a context where reserves were already below their usual average level. “It’s a deterrent for those who store oil,” says John Kilduff. “You are losing money.”