Oil prices rose on Tuesday, recouping some of the previous day’s losses as investors remained concerned that the Israel-Hamas war could escalate into a broader conflict in the oil-exporting region, leading to potential supply disruptions.
Brent crude futures were up 57 cents, or 0.6%, to $90.40 a barrel by 03:21 GMT, while West Texas Intermediate (WTI) crude futures were up 54 cents, or 0.6%, to $86.03 a barrel.
The market is on the rise following a decline in the last two sessions and on nagging fears of possible supply disruptions in the Middle East.
Both benchmarks fell more than 2 percent on Monday as intensifying diplomatic efforts to contain conflict between Israel and Hamas in the Middle East, the world’s biggest oil supply region, eased investor concerns about supply disruptions.
Sources said the US advised Israel to stop its ground offensive in the Gaza Strip, while Israel continued its bombardment of Gaza on Monday, following airstrikes overnight to prevent support for Hamas from southern Lebanon.
On Monday, Hamas released two Israeli women who were among more than 200 hostages taken during an attack in southern Israel on October 7.
The Israel-Hamas conflict remains highly volatile and open. The market is divided on whether the reignited conflict will continue to ease despite Hamas continuing to release hostages.
Israel hit hundreds of targets in Gaza from the air on Monday during bombing raids on the besieged Palestinian strip, where deaths have risen and civilians are trapped in dire conditions.
While all eyes are on the situation in Israel and Gaza, OPEC production, and the pace of demand recovery in China, WTI is expected to move in the 80-90 dollar range for a while.
Investors focused on U.S. inventory data that would provide ideas into demand. U.S. crude oil inventories were expected to rise last week, while distillate and gasoline inventories fell, according to a preliminary survey on Monday.
The survey was conducted ahead of reports from the American Petroleum Institute (API) industry group at 20:30 GMT on Tuesday and the Energy Information Administration, the statistical arm of the US Department of Energy, at 14:30 GMT on Wednesday.
