Houston/Singapore — Oil prices were mixed on Tuesday, after losses in the previous session, as markets weighed broad economic concerns against weather-related US demand-supply issues and continued tensions in the Middle East that led to more tanker diversions.
Brent crude futures rose 5c, or about 0.06%, to $78.20 a barrel at 3.34am GMT. The contract had earlier settled 14c lower on Monday.
US West Texas Intermediate crude was down 20c, or 0.28%, at $72.48 per barrel after a US public holiday on Monday.
“Fears of weaker economic growth weighed on sentiment across the commodity complex. This was despite rising tensions in the Red Sea,” ANZ analysts said in a client note.
Asian shares dropped to a one-month low, US stock futures fell and the dollar rose on Tuesday as hawkish remarks from central bankers tempered expectations for interest rate cuts, ahead of an economic outlook speech by the US Federal Reserve’s Christopher Waller at 4pm GMT on Tuesday.
“At present, the wait-and-see sentiment in the oil market is relatively heavy, with the escalation of geopolitical conflicts offset by the (earlier) accumulation of inventory (in the US),” said CMC Markets’ analyst Leon Li.
Extremely cold weather in the US that could curb oil production and affect refinery operations was in focus as well, analysts said.
North Dakota oil production has already fallen by 400,000 to 425,000 barrels per day on extreme cold and related operational issues.
In the Middle East, Yemen’s Houthi movement will expand its targets in the Red Sea region to include US ships, an official from the Iran-allied group said on Monday, as it vowed to keep up attacks after US and British strikes on its sites in Yemen.
More oil tankers were steering clear of the southern Red Sea on Monday due to the disruptions, increasing the cost of shipping and the time it takes to move oil from one place to another.
Oil prices rose 2% last week in response to the rising conflict in the region, but the lack of direct impact on oil production could be limiting gains, according to analysts.