LONDON, Nov 19 (Reuters): Oil slipped on Tuesday pressured by the restart of production at Norway's Johan Sverdrup oilfield, although investor caution arising from fears of an escalation in the Russia-Ukraine war limited the decline.
Equinor has resumed partial production from the oilfield, Western Europe's largest, following a power outage. An outage at the North Sea field helped prices to climb by over 3 per cent on Monday.
Brent crude futures were down 29 cents, or 0.4 per cent, to $73.01 a barrel by 1240 GMT, while US West Texas Intermediate crude futures slipped by 34 cents, or 0.5 per cent, to $68.82.
"I guess the partial restart of the Sverdrup field is the driver of the setback, as well as a slightly stronger US dollar," said Giovanni Staunovo, analyst at UBS.
The US dollar edged up on Tuesday to within striking distance of its one-year high. A strong dollar makes commodities such as oil more expensive for other currency holders and tends to weigh on prices.
Another continuing outage provided support. Kazakhstan's biggest oilfield, Tengiz, has reduced oil output by 28 per cent to 30 per cent for repairs which are expected to be completed by Saturday, the country's energy ministry said.
A rise in geopolitical tensions also supported prices.
In a significant reversal of policy, US President Joe Biden's administration allowed Ukraine to use US-made weapons to strike deep into Russia, two US officials and a source familiar with the decision said on Sunday.
The Kremlin said on Monday that Russia would respond to what it called a reckless decision by the Biden administration, having previously warned that such a decision would raise the risk of a confrontation with the US-led NATO alliance.
Investors are wary, said Toshitaka Tazawa, an analyst at Fujitomi Securities, as they are "assessing the direction of the Russia-Ukraine war after the weekend's escalation".
