Oil Steadies As Tighter Supplies Balanced By Demand Concerns

Oil steadied as investors juggled signs of tighter supplies with elevated tensions in the Middle East and a still-shaky demand outlook.

West Texas Intermediate edged higher above $77 a barrel after dropping 1.8% on Tuesday from Friday’s close. Brent was near $82. OPEC+ producer Russia met its target for export cuts in January, complying with an earlier pledge to the group, according to government data. Chinese figures showed that while trips increased over the Lunar New Year holidays, tourists spent frugally.

Crude has remained in a $10-a-barrel trading range this year as the push and pull of bearish and bullish factors led to a decline in volatility. Attacks on ships in the Red Sea and the Israel-Hamas war have ramped up tensions in the Middle East and added a geopolitical risk premium to prices.

The most recent assault by Houthi militants in the vital waterway forced the crew to the abandon the vessel, underscoring the continued risks to security in the region. As well as unnerving crews, it will likely lead to more shipowners avoiding the Red Sea, adding to transport time and costs. – Bloomberg

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