Shafaq News/ Oil prices rose slightly on Tuesday, driven by concerns that tensions in the Middle East could disrupt the oil supply. However, the uncertainty surrounding potential US interest rate cuts and their impact on fuel demand tempered the gains. According to REUTERS.
Brent futures edged up 7 cents or 0.1% higher to $82.07 a barrel at 0420 GMT. U.S. West Texas Intermediate (WTI) crude rose 10 cents or 0.1% to $77.02 a barrel.
Oil prices were near flat in Monday's trade, after gaining 6% last week.
The ongoing conflict in the Middle East contributed to the high oil prices. However, concerns about interest rates acted as a limiting factor. The firing of two missiles by Yemen's Iran-aligned Houthis at an Iran-bound cargo ship in the Red Sea added to the geopolitical tensions in the region.
The potential impact of US sanctions on Iran and the subsequent effect on oil market supplies also weighed on market sentiment. Additionally, worries about interest rates persisted, with the New York Fed reporting that the outlook for inflation in the near and long term remained unchanged, remaining above the Fed's 2% target rate.
The possibility of delayed Fed interest rate cuts due to inflation concerns could lead to reduced oil demand by slowing economic growth. Market participants were eagerly awaiting US inflation data, while British inflation and euro zone Gross Domestic Product data were expected in the coming days.
Industry data on US crude inventories, scheduled for release later on Tuesday, was also anticipated. Analysts estimated that crude inventories rose by about 2.6 million barrels in the week to Feb. 9. Furthermore, the Organization of the Petroleum Exporting Countries (OPEC) was set to release its monthly oil market report, with Iraq reaffirming its commitment to OPEC's decisions and production limits.
Looking ahead, the focus will be on what OPEC+ decides to do with their voluntary supply cuts, which are set to expire at the end of March. OPEC and its allies, including Russia, will make a decision in March on whether to extend voluntary oil production cuts in place for the first quarter. In November, OPEC+ had agreed to voluntary output cuts totaling about 2.2 million barrels per day (bpd) for the first quarter of this year, led by Saudi Arabia's 1 million bpd voluntary reduction.
(REUTERS)