Kazakhstan Unrest Causes Oil Supply Worries, Prices Jump -6 January, 2022

An uprising in Kazakhstan left worries that supplies from OPEC+ producers may be disrupted while output simultaneously dipped in Libya. Brent crude futures were up 0.6% or 48 cents to $82.47 per barrel, a 1.5% increase from the previous session. U.S. West Texas Intermediate crude futures were 0.6% or 50 cents higher at $79.96 per barrel, a 1.2% jump from the previous session. The increase in prices is likely a direct correlation with the unrest in Kazakhstan, causing market jitters, while Libya’s political situation deteriorates, sidelining output. The protests in Kazakhstan began in the oil-rich western regions after state price caps on butane and propane were removed on New Year’s Day. As supply concerns overtook worries that the rapid spread of the Omicron coronavirus variant might hurt demand, Brent and WTI were on track to post a 6% gain in the first week of the year, with prices at their highest since late November. Libya’s production fell to 729,000 barrels per day, down from 1.3 million barrels per day, partially due to pipeline work. OPEC+ have also not been keeping up with demand growth, with output only reaching 70,000 barrels per day, well under the 230,000 barrel per day increase allowed.