Oil Prices Rise Amid Concerns About Red Sea Attacks on Shipping
Supply Worries Continue to Drive Oil Prices Up
Oil prices continued their upward trajectory on Tuesday, building on gains from the previous day. The market was reacting to attacks on shipping in the Red Sea, which have heightened concerns about supply disruptions.
Global Oil Futures Show Positive Movement
International benchmark Brent crude futures rose by 0.44% to reach $82.89 a barrel, while U.S. West Texas Intermediate crude futures (WTI) were up by 0.40% to $77.89 a barrel. The increase in prices was attributed to the recent events in the Red Sea and a more hawkish stance from the Federal Reserve.
Geopolitical Tensions Impact Oil Markets
The attacks in the Red Sea, allegedly carried out by Iran-aligned Houthis, have caused disruptions in shipping routes, leading to higher freight rates and longer shipping times. The situation has added to existing concerns about global oil supply.
Global Response to Middle East Conflict
Amid escalating tensions, U.S. President Biden announced that Israel had agreed to a temporary halt in military activities in Gaza for the Muslim holy month of Ramadan. Meanwhile, efforts for a truce between Hamas and Israel are underway, including discussions on a ceasefire and a possible prisoner-hostage exchange.
China’s Demand Signals Recovery
Positive indications from China, one of the world’s largest oil consumers, have also supported oil prices. Despite concerns over demand, Chinese refineries have shown continued interest in purchasing crude oil, reflecting a recovering market post the Lunar New Year travel boom.
Russian Ban on Gasoline Exports
Russian authorities announced a six-month ban on gasoline exports starting from March 1 to meet rising domestic demand. This move aims to ensure ample supply for consumers and farmers while allowing refineries to undergo necessary maintenance.
Market Expectations and Industry Data
Analysts are eagerly awaiting the American Petroleum Institute’s weekly inventory data release, estimated to show a rise of approximately 1.8 million barrels in crude inventories by the week ending February 23. This data will provide crucial insights into the current state of the oil market.
