Oil futures rose Tuesday, taking back some of the ground lost in the previous session as traders weighed continued disruptions to Red Sea shipping.
Price action
-
West Texas Intermediate crude
CL00,
+2.19%
for February delivery
CL.1,
+2.19%CLG24,
+2.19%
rose $1.44, or 2%, to $72.21 a barrel on the New York Mercantile Exchange. -
March Brent crude
BRN00,
+2.10%BRNH24,
+2.10%,
the global benchmark was up $1.55, or 2%, at $77.67 a barrel on ICE Futures Europe.
Market drivers
WTI plunged more than 4% and Brent fell over 3% on Monday as investors reacted to Saudi Arabia’s decision to slash its official selling price to its main market in Asia and other regions, stoking worries about the strength of demand.
Crude prices took back some of the lost ground Tuesday. Shipping disruptions in the Red Sea and fears the Israel-Hamas war could spiral into a wider conflict that affects Middle Eastern supplies may help keep a floor under crude, analysts said, though U.S. crude output at record levels above 13 million barrels a day was seen undercutting efforts by Saudi Arabia and its OPEC+ allies to boost prices via production cuts.
“With US oil production at record highs and having the capacity to rise much further as active oil rigs remain fairly low, there is a concern that other major producers like Saudi Arabia will attempt to defend their market share by pumping even more or offering deeper discounts,” said Marios Hadjikyriacos, senior investment analyst at XM, in a note.
“The risk of another price war could keep oil prices on the ropes for some time,” he said.
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