Oil prices stabilized in Asian trading on Wednesday after sharp moves earlier in the week as markets weighed on concerns about the U.S. economy and potential supply disruptions from ongoing tensions in the Red Sea.
Brent crude fell 1 cent, or 0.01%, to $75.88 a barrel by 03:00 GMT, while West Texas Intermediate (WTI) crude futures rose 4 cents, or 0.06%, to $70.42 a barrel.
Oil prices had climbed about $2 at the beginning of the week following attacks by Houthi rebels on ships in the Red Sea over the weekend and the reported arrival of an Iranian warship on Monday. A wider conflict could close key waterways for oil transportation and disrupt trade flows.
However, the market fell in the previous session as market optimism about US interest rate cuts faded ahead of Federal Reserve minutes and employment data.
Energy markets have not escaped the broader pressure on risk assets as equity markets also weakened. The weakness in oil continues despite rising tensions in the Middle East.
Expectations of ample supply in the first half of 2024 have had a limited impact on prices ahead of OPEC+ plans to hold a Joint Ministerial Monitoring Committee (JMMC) meeting in early February. Sources said an exact date of meeting has not been determined.
While the geopolitical situation is a cause for concern for the oil market, a comfortable oil balance in the first half of 2024 helps alleviate some of these concerns.
Given the size of the cuts, it will become increasingly difficult for the group to make further cuts in 2024. The cuts are voluntary rather than group-wide.
Ahead of the weekly U.S. crude and product inventory reports, analysts predict that crude inventories fell last week, while distillate and gasoline inventories likely increased.
Data from the American Petroleum Institute industry group (API) will be released at 21.30 GMT. Data from the Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, will be released at 1600 GMT on Thursday, delayed by one day due to the New Year holiday.
