Oil prices rose in Tuesday’s trading as geopolitical tensions in the Middle East continued to fuel concerns, but gains were limited as bearish demand sentiment and the market awaited monthly reports from oil utilities.
Brent futures for May delivery were up 26 cents, or 0.3%, at $82.47 a barrel by 04:08 GMT. The April contract for WTI crude oil rose 17 cents, or 0.2%, to $78.10 a barrel.
Although the war between Israel and Hamas has not caused a significant disruption in oil supplies, the Houthis in Yemen have been attacking ships in the Red Sea and the Gulf of Aden since November as part of a campaign they describe as solidarity with the Palestinians.
As US-British coalition forces responded to these attacks, their airstrikes hit port cities and small towns in western Yemen on Monday.
Capping gains however, are the outlooks for weaker demand and increasing supply from producers outside of the Organization of Petroleum Exporting Countries (OPEC).
Downward demand sentiment and increasing non-OPEC supply currently do not allow the market to move higher in oil prices.
The International Energy Agency (IEA) expects oil supply to rise to a record level of approximately 103.8 million barrels, driven by non-OPEC+ countries such as the United States, Brazil, and Guyana.
Meanwhile, China’s crude oil imports increased in the first two months of the year compared to the same period in 2023, but remained weaker than in previous months, continuing the softening trend in the purchases of the world’s largest buyer.
Meanwhile, the market awaits demand forecasts from monthly reports from OPEC, IEA, and EIA. While forecasts are thought to be largely unchanged, any upside surprises surely ease demand concerns.
