Oil prices rose slightly on Tuesday after falling in the previous session as markets weighed on tensions in the Middle East, demand concerns, and OPEC’s rising supply.
Brent crude futures were up 18 cents, or 0.2%, at $76.30 a barrel at 04:45 GMT. West Texas Intermediate (WTI) crude futures were up 0.1%, or 6 cents, at $70.83 a barrel.
The indexes fell more than 3% and 4% respectively on Monday due to sharp price cuts by top exporter Saudi Arabia and a rise in OPEC production.
Saudi Arabia’s price cuts and OPEC’s increased production offset supply concerns caused by rising geopolitical tensions in the Middle East.
The Israeli army’s statement that its fight against Hamas in the Gaza war will continue in 2024 causes markets to worry that the conflict could turn into a regional crisis that could disrupt oil supplies in the Middle East.
Blinken arrived in Tel Aviv late Monday to brief Israeli officials on two days of talks with Arab leaders on ending the war.
Surveys have found OPEC oil production increased in December, with increases in Angola, Iraq, and Nigeria offsetting ongoing cuts by Saudi Arabia and other members of the broader OPEC+ alliance.
Increased supply led Saudi Arabia to cut the official February sales price of its flagship Arab Light crude to Asia to a 27-month low.
Barring an unforeseen flare-up in the Middle East, oil prices will likely trade in the $75 to $80 per barrel range soon.
On the supply side, there are some bullish factors affecting oil production of around 0.3 million barrels per day, such as the closure of Libya’s largest oil field.
The dollar, which has been supporting prices, paused its rise on Tuesday as investors reaffirmed bets that the Federal Reserve might cut interest rates sometime this year. The weakening of the dollar increases oil prices as crude oil becomes cheaper for those who hold other currencies.
The market is awaiting US stock data from the American Petroleum Institute industry group, with weekly data due at 21:30 GMT.
