TOKYO- Oil prices retreated on Tuesday after the previous day’s rally driven by halted production at Norway’s Johan Sverdrup oilfield, but investors remained cautious amid fears of a potential escalation in the Russia-Ukraine war.
Brent crude futures for January delivery slipped 7 cents, or 0.1 percent, to $73.37 a barrel while US West Texas Intermediate crude futures for December delivery were at $69.23 a barrel, down 7 cents, or 0.1 percent. The more active WTI January contract fell 4 cents, or 0.1 percent, to $69.21.
Both benchmarks climbed more than $2 a barrel on Monday.
“Some position adjustments kicked in after Monday’s rally,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.
“But investors stayed wary, assessing the direction of the Russia-Ukraine war after the weekend’s escalation,” he said.
Russia unleashed its largest airstrike on Ukraine in almost three months on Sunday, causing severe damage to the country’s power system.
In a significant reversal of Washington’s policy, 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.
