Daily Oil Price Fundamental Forecast – Speculators are betting on the escalation of supply problems in Kazakhstan

US West Texas Intermediate and international Brent crude oil futures gave way on Friday as traders weighed delivery concerns over the civil unrest in Kazakhstan and outages in Libya against a US labor market report that fell short of expectations and its potential impact on Federal Reserve policies.

On Friday March, the WTI crude oil futures were trading at $ 78.44, down $ 0.44, or -0.56%. March closed Brent Crude at $ 81.75, down $ 0.24, or -0.29%, and the United States Oil Fund closed at $ 56.67, down $ 0.22 or -0 , 39%.

Once again, supply and demand will matter, but this time supply concerns seem to be helping. Demand came into the equation on Friday, however, with the headline of the employment report raising some concerns about the Omicron impact.

All eyes on the escalation in Kazakhstan

Given the news panic since last Tuesday’s OPEC + decision to ramp up production in February, traders have shifted their focus to the escalating unrest in Kazakhstan and its potential impact on supply as the country is an OPEC + supplier.

According to Reuters, security forces appeared to have recaptured the streets of Kazakhstan’s capital after days of violence on Friday, and the Russian-backed president said he had ordered his troops to shoot to quell a nationwide uprising.

The day after Moscow dispatched paratroopers to quell the uprising, police patrolled the rubble-strewn streets of Almaty, although some gunfire could still be heard.

Kazakhstan production reduced

Production at Kazakhstan’s leading Tengiz oil field was cut on Thursday, operator Chevron Corp said, as some contractors disrupted train lines in support of the protests taking place in the Central Asian country.

Kazakhstan is a major oil producer, producing around 1.6 million barrels per day (bpd) in recent months and has rarely seen production disrupted by civil unrest or natural disasters.

“TCO production will continue, but production has temporarily adjusted due to logistics,” said Chevron, the largest foreign oil producer in Kazakhstan with a 50 percent stake in the Tengizchevroil (TCO) joint venture.

Protesters in the field have halted pulling activities used to export oil, sources told Reuters.

TCO produces around 700,000 bpd. It was not clear by how much the production was reduced. Other top fields in Kazakhstan are Onshore Karachaganak and Offshore Kashagan.

In addition to Chevron, most of the top foreign companies are involved in the three key projects, including Exxon Mobil, Lukoil, Royal Dutch Shell, Eni, Total Energies, CNPC and Inpex.

A Shell spokesman said production at Karachaganak and Kashagan companies would continue.

Short term outlook

At the start of trading next week, traders will closely monitor developments in Kazakhstan. The situations observed include the operations that are currently under constant review by the oil companies.

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