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Oil steadies as Sverdrup field reboot counters geopolitical concerns

Oil rates steadied on Tuesday as the restart of production at Norway's Johan Sverdrup oilfield balanced out financier concerns about an escalation in the RussiaUkraine war.

Equinor resumed partial production from the North Sea oilfield, Western Europe's biggest, after a power interruption there assisted lift oil costs by over 3% on Monday.

Brent crude futures were down 12 cents, or 0.2%, at $ 73.18 a barrel by 1425 GMT, while U.S. West Texas Intermediate unrefined futures slipped by 19 cents, or 0.3%, to $68.97.

I think the partial restart of the Sverdrup field is the motorist of the problem, in addition to a somewhat stronger U.S. dollar, said Giovanni Staunovo, analyst at UBS.

The U.S. dollar edged up on Tuesday to within striking range of its 1 year high. A strong dollar makes commodities such as oil more pricey for other currency holders and tends to weigh on costs.

A continuing failure at Kazakhstan's greatest oilfield, Tengiz, also supplied support. Tengiz has actually reduced oil output by 28% to 30% for repairs which are expected to be finished by Saturday, the country's energy ministry said.

A rise in geopolitical stress also underpinned costs.

Ukraine utilized U.S. ATACMS missiles to strike Russian area for the first time on Tuesday, Moscow said, in an attack described by Russian foreign minister Sergei Lavrov as a. Western escalation.

Russian President Vladimir Putin on Tuesday decreased the. limit for a nuclear strike in reaction to a wider range of. standard attacks.

U.S. President Joe Biden's administration enabled Ukraine to. use the U.S.-made weapons to strike deep into Russia, two U.S. authorities and a source acquainted with the decision stated on. Sunday.

The Kremlin stated on Monday that Russia would react to what. it called a careless decision by the Biden administration,. having previously warned that such a choice would raise the. danger of a conflict with the U.S.-led NATO alliance.

Financiers beware, said Toshitaka Tazawa, an expert at. Fujitomi Securities, as they are assessing the instructions of the. Russia-Ukraine war after the weekend's escalation.

While oil's straight-out price has actually found support this week, the. market structure has compromised. U.S. crude turned to contango. for the first time because February on Monday << CLc1-CLc2 > in a. sign that supply tightness was alleviating.

(source: Reuters)