Oil prices were little changed on Tuesday as investors focused on geopolitical tensions in the Middle East and optimism that the U.S. Federal Reserve would soon begin cutting interest rates, boosting global economic growth and increasing demand.
Brent crude futures were down 26 cents, or 0.3%, at $79.13 a barrel as of 01:15 GMT. West Texas Intermediate (WTI) crude was up 3 cents at $73.59 a barrel.
Trading is weak with some markets still closed for the Boxing Day bank holiday.
Both indicators gained nearly 3% last week as Houthi attacks on ships disrupted global shipping and trade and raised tensions in the Middle East as the Israel-Gaza conflict continues.
Shipping companies suspended the passage of ships through the Red Sea, which connects to the Suez Canal, which carries about 12 percent of world trade, and imposed additional fees for rerouting ships.
However, Maersk said in a statement on Sunday that it was preparing to restart shipping operations in the Red Sea and the Gulf of Aden, expressing its belief in efforts to ensure the security of trade in the region.
Separately, Iran on Monday denied a US claim that a drone launched from Iran hit a chemical tanker in the Indian Ocean.
The Pentagon said over the weekend that the Liberian-flagged, Japanese-owned, and Dutch-operated Chem Pluto ship was hit 200 nautical miles (370 km) off the coast of India.
Oil prices were also supported by expectations that the Fed will cut interest rates next year after U.S. data released on Friday showed inflation by some key measures is currently at or below the central bank’s 2% target.
Low-interest rates reduce consumer borrowing costs, which can increase economic growth and oil demand.
