Oil Prices Rise Amid Concerns About Red Sea Attacks on Shipping
The Impact of Red Sea Attacks on Oil Prices
Oil prices continued to climb on Tuesday following attacks on shipping in the Red Sea that have heightened supply concerns. Crude oil futures saw an increase, with Brent rising by 0.44% to $82.89 a barrel and WTI up by 0.40% to $77.89 a barrel.
Factors Driving Oil Price Increase
The attacks by Iran-aligned Houthis have disrupted shipping routes, leading to higher freight rates and shipping delays. Additionally, news of a missile fired at a U.S. oil tanker in the Gulf of Aden has added to the supply worries in the market.
Efforts towards Peace and Stability
Efforts towards peace were also seen as U.S. President Biden announced Israel’s agreement to halt military activities in Gaza during Ramadan. Hamas is considering a truce proposal that includes a cessation of hostilities and a prisoner-hostage exchange.
Chinese Demand and Russian Export Ban
Oil prices were further supported by signs of increased demand in China, despite maintenance halts at refineries. Meanwhile, Russia announced a six-month ban on gasoline exports starting March 1 to accommodate rising domestic demand and refinery maintenance.
Market Expectations and Inventory Data
After a recent decline, oil benchmarks surged over 1% on Monday, with market analysts predicting a rise in crude inventories. The American Petroleum Institute is set to release weekly inventory data, with estimates suggesting an increase of about 1.8 million barrels.
A market focus for the day will be the American Petroleum Institute industry group’s weekly data on inventories which is due to be released at 4:30 p.m. EST (2130 GMT).
Analysts polled by Reuters on Monday estimated on average that crude inventories rose by about 1.8 million barrels in the week to Feb. 23.
