Oil prices were little changed on Tuesday as investors worried about conflicting supply and demand, rising tensions in the Middle East and cold weather disrupted production in the United States.
Brent crude futures were last down 2 cents at $80.04 a barrel by 0353 GMT, while WestTexas Intermediate (WTI) crude futures were last down 1 cent at $74.75 a barrel.
Both contracts rose nearly 2% on Monday as Ukraine’s drone attack on Novatek’s Ust-Luga fuel export terminal raised supply concerns and pushed up prices. Novatek will likely resume large-scale operations here within a few weeks.
Damage to loading docks at the Ust-Luga terminal only affected exports for a short time. However, this move shows that the Russia-Ukraine war has moved into a new phase in which the parties target the basic energy infrastructure.
Houthi attacks on ships in and around the Red Sea region have disrupted global shipping and raised fears of inflation.
In the Middle East, US and British forces carried out a new round of attacks targeting the Houthis’ underground storage area and missile and surveillance sites used by the Houthis.
Some analysts remained optimistic about short-term market fundamentals despite these ongoing conflicts.
The impact of extreme weather conditions on US crude oil production and the rise of geopolitical conflicts are supporting oil prices.
In the U.S., 20% of North Dakota’s oil production remains shut down due to extreme cold and operational difficulties, the state’s pipeline official said Monday.
Concerns about China’s slowing economic recovery are weighing on markets and concerns about global oil demand are rising, given that the Asian giant is the world’s largest crude oil importer.
Chinese policymakers have implemented a range of measures to support the economy, but domestic consumption remains stagnant, making oil traders nervous about demand prospects.
WTI crude oil prices managed to close above the 50-day moving average on Monday for the first time since October 24 last year. The high closure follows a similar daily close above the 20-day moving average last Thursday.
Price weakness was also limited by surveys predicting that US crude oil inventories would fall by about 3 million barrels in the week to January 19. While distillate stocks were expected to decrease last week, gasoline stocks were expected to increase. Official government data is expected to be released on January 24.
