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Brent crude fell 13 cents, or 0.2%, to $81.62 a barrel at 1136
GMT, and U.S. West Texas Intermediate (WTI) crude was down 17
cents, or 0.2%, at $78.73 a barrel.
Bothe contracts had risen around 50 cents earlier in the
session.
Oil prices gained 5% last week after protests in Kazakhstan
disrupted train lines and hit production at the country's top
oilfield Tengiz, while pipeline maintenance in Libya pushed
production down to 729,000 barrels per day from a high of 1.3
million bpd last year.
Kazakhstan's largest oil venture Tengizchevroil (TCO) is
gradually increasing production to reach normal rates at the
Tengiz field after protests limited output there in recent days,
operator Chevron said on Sunday.
"The tailwind lent to oil prices by supply concerns should
therefore abate, which suggests that prices will fall this
week," Commerzbank analyst Carsten Fritsch said.
The fall of Azeri crude oil exports from Turkey's Ceyhan port
lent some support to prices. February exports were set at 14.72
million barrels, down from 17.27 million in January, a schedule
seen by Reuters showed.
Oil is also drawing support from rising global demand and
lower-than-expected supply additions from the Organization of
the Petroleum Exporting Countries, Russia and allies, or OPEC+.
OPEC's output in December rose by 70,000 bpd from the previous
month, versus the 253,000 bpd increase allowed under the OPEC+
supply deal which restored output slashed in 2020 when demand
collapsed under COVID-19 lockdowns.
Strong demand and sharp fall in oil inventories have pushed the
market structure for Brent and U.S. crude into deep
backwardation.
A backwardated market structure means the current value is
higher than it will be in later months and encourages traders to
release oil from storage and sell it promptly.
Graphic: Oil price structure signals firm demand- https://graphics.reuters.com/GLOBAL-OIL/zjpqknyxrpx/chart_eikon.jpg
A surge in COVID-19 infections, however, put pressure on oil
prices. Despite early studies showing a lower risk of severe
disease or hospitalisation from Omicron compared to the
previously dominant Delta variant, healthcare networks across
Spain, Britain, Italy and elsewhere have found themselves in
increasingly desperate circumstances.
(Reporting by Bozorgmehr Sharafedin in London, additional
reporting by Florence Tan and Naveen Thukral; Editing by Kim
Coghill, Jason Neely and Louise Heavens)
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