The sun is visible behind a crude oil pump jack in the Permian Basin in Loving County, Texas, United States, November 22, 2019.
Angus Mordant | Reuters
Oil futures rose slightly on Tuesday after falling in the previous session as crude prices struggle to break out amid uncertainty over future developments in the Middle East conflict and a unclear supply and demand situation.
The West Texas Intermediate contract for March added 53 cents, or 0.69%, to trade at $77.45 a barrel in morning trading. The Brent contract for April gained 58 cents, or 0.71%, to trade at $82.45 a barrel.
U.S. crude and the global benchmark remained largely flat on Monday after rising more than 6% last week as the war in Gaza raged, underscoring a lingering risk to crude supplies if the conflict spreads any further.
Oil prices have struggled to break out of the $10 range, amid uncertainty in the Middle East and an uncertain supply and demand outlook for the year.
However, WTI and Brent are up around 8% and 7% respectively for the year.
“Oil prices have been numbed by what may or may not have happened in the Middle East,” John Evans, an analyst at oil broker PVM, said in a note to clients.
“All important charts can be immediately overturned by one untoward act, a missile or a sudden peace deal and crude prices will move by $10 per barrel,” Evans wrote.
President Joe Biden sent CIA Director William Burns to Cairo for talks on a temporary ceasefire in the Gaza war in exchange for the release of hostages by Hamas.
Burns’ arrival in the Middle East comes as efforts for a truce failed last week after Israeli Prime Minister Benjamin Netanyahu rejected Hamas’ proposed terms for a pause in fighting.
Netanyahu vowed to continue the Israeli offensive in Gaza and push into the southern town of Rafah on the Egyptian border, increasing tensions with Cairo.
The war in Gaza has brought the United States and Iran closer to direct confrontation, which geopolitical and oil market analysts fear could impact supplies in the event of a disruption in the Gaza Strait. Hormuz.
On the supply and demand front, the head of the International Energy Agency told Bloomberg News that oil markets should remain “comfortable” this year, barring further geopolitical or weather disruptions. extremes.
Consumption will increase by 1.2 million to 1.3 million barrels per day this year, but production in the United States, Brazil, Canada and Guyana will match demand, the head of the AIE, Fatih Birol.
Traders await US inflation data as well as OPEC’s monthly oil outlook report on Tuesday.