By Laila Kearney
NEW YORK (Reuters) -Oil prices slipped on Tuesday as traders weighed production outages in the U.S. and tensions in the Middle East and Europe against rising crude supply in Libya and Norway.
Brent crude futures lost 71 cents, or 0.8%, to $79.35 a barrel at 12:53 p.m. EST (1753 GMT). U.S. West Texas Intermediate crude futures (WTI) fell 55 cents, or 0.7%, to $74.51 a barrel.
Oil futures remained volatile as uncertainty persisted around several supply and demand indicators.
“Traders weigh up economic prospects, interest rates, OPEC+ and the risk of supply disruptions as a result of events in the Red Sea. We’re no clearer on any of these than we were a few weeks ago,” OANDA analyst Craig Erlam said.
Crude prices rose by around 2% on Monday after a Ukrainian drone strike on Novatek’s Ust-Luga Baltic fuel export terminal near Russia’s second city St Petersburg raised supply concerns.
In the Middle East, tensions rose after U.S. and British forces carried out a second joint round of strikes on Houthi positions in Yemen.
“You’ve got the geopolitical pressures that aren’t enough to really rally the oil market, but they’re enough to keep the market from bottoming out of the range,” said Bob Yawger, director of energy futures at Mizuho Bank.
Supply constraints in the U.S. also helped to limit price declines. More than 20% of North Dakota’s oil output remained shut in due to cold weather and operational challenges, the state’s pipeline authority said.
Weather-induced shutdowns could deplete crude inventories reported on Tuesday by the American Petroleum Institute (API), PVM analyst John Evans said.
A Reuters poll forecast U.S. crude inventories would fall by about 3 million barrels in the week to Jan. 19.
Still, rising production elsewhere put downward pressure on prices.
Norway’s crude production rose to 1.85 million barrels per day (bpd) in December, up from 1.81 million bpd the previous month and beating analysts’ forecasts of 1.81 million bpd, according to the Norwegian Offshore Directorate (NOD).
In Libya, production at the 300,000 bpd Sharara oilfield restarted on Jan. 21 after the end of protests that had halted output since early this month.
(Additional reporting by Robert Harvey and Noah Browning in London, and Emily Chow and Trixie Yapp in Singapore; Editing by Kevin Liffey, David Gregorio and Christina Fincher)
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