Image Source: Unsplash
 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $59.65 during the early Asian trading hours on Wednesday. The WTI price edges higher amid the escalating Greenland crisis and an unplanned outage at a major Kazakhstan field. Traders await the release of the American Petroleum Institute (API) crude oil stockpiles report later on Tuesday.

Bloomberg reported on Tuesday that Kazakh oil producer Tengizchevroil, led by Chevron (CVX), said that it had temporarily halted production at the Tengiz and Korolev oilfields after two fires at power generators. The Tengiz field will be shut for another seven to 10 days, and supply disruptions could provide some support to the WTI price. 

Kazakhstan had already reduced 900,000 barrels per day (bpd) of crude production that feeds the Caspian Pipeline Consortium terminal on Russia's Black Sea Coast due to drone strikes.

"Tengiz is amongst the largest fields in the world and so the outage is certainly disruptive for crude flows," said Ajay Parmar, director of energy and refining at ICIS. "But this disruption does look to be temporary, and so if the tariffs rhetoric continues, we expect prices to fall back," he said

US President Donald Trump over the weekend threatened to impose tariffs on eight European nations that oppose his plans to take control of Greenland. It would rise to 25% if an agreement is not reached by June 1. Trump is set to talk about Greenland at the World Economic Forum in Davos, Switzerland, on Wednesday. Fears of a damaging US-EU trade war could hurt market sentiment and might cap the upside for the black gold.  

More By This Author: