Oil prices fell on Tuesday as investors kept an eye on a resumption in supply from Kazakhstan, but price declines were limited as a massive winter storm hit crude production and affected refineries on the U.S. Gulf Coast, Reuters reported.
Brent crude futures fell 44 cents, or 0.7%, to $65.15 a barrel at 0440 GMT. U.S. West Texas Intermediate crude was down 35 cents, or 0.6%, at $60.28 a barrel.
Kazakhstan is poised to resume production from its biggest oil field, its energy ministry said on Monday, though industry sources said volumes were still low.
The CPC, which operates Kazakhstan's main exporting pipeline, also said it returned to full loading capacity at its terminal on the Russian Black Sea coast after maintenance was completed at one of its three mooring points.
"A recovery in these flows should improve availability in the prompt market, putting some pressure on the Brent prompt spread, which has strengthened significantly through January," ING commodities strategists said in a note.
The strength in timespreads has been at odds with estimates for a large oil surplus," ING added.
The premium for March Brent futures over April has risen to more than 80 cents a barrel, compared with about 30 cents at the start of the month.
Oil price declines were tempered by a loss of production in the U.S. as a severe winter storm swept across the country, straining energy infrastructure and power grids.
U.S. oil producers lost up to 2 million barrels per day or roughly 15% of national production over the weekend, analysts and traders estimated.
At the same time, several refineries along the U.S. Gulf Coast reported issues related to the freezing weather, which Daniel Hynes, an analyst at ANZ, said raised concerns about fuel supply disruptions.
On the geopolitical front, a U.S. aircraft carrier and supporting warships have arrived in the Middle East, two U.S. officials told Reuters on Monday, expanding President Donald Trump's capabilities to defend U.S. forces, or potentially take military action against Iran.
Supply risks haven't totally evaporated ... Tension in the Middle East persists after President Trump dispatched naval assets to the region," Hynes said.
Further on the supply front, eight members of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, are expected to keep the group's pause on oil output increases for March at a meeting on February 1, three OPEC+ delegates told Reuters.
The eight OPEC+ members meeting are Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria and Oman.
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