Oil prices experienced an upturn in Asian trading on Tuesday, following a more than 3% decline in the previous session. Concerns about supply disruptions stemming from conflict in the Middle East overshadowed lackluster economic data from China.
December Brent crude futures, set to expire on the day, gained 36 cents, equivalent to 0.41%, reaching $87.81 per barrel as of 0305 GMT. Meanwhile, the more actively traded January Brent crude futures saw a rise of 29 cents, or 0.34%, reaching $86.64 per barrel. In the case of U.S. West Texas Intermediate crude, it increased by 34 cents, or 0.41%, reaching $82.65 per barrel.
Oil prices had dipped by more than 3% the previous day as investors displayed caution ahead of the U.S. Federal Reserve meeting scheduled for Wednesday, despite an escalation in Israel’s attacks on Gaza.
CMC Markets’ analyst, Leon Li, based in Shanghai, China, pointed out, “Although it implemented a ground attack, it also retreated very quickly, and Iran is currently only resorting to verbal deterrence.” He further noted, “If this evolves into a full-scale invasion and there is involvement from Iran, tighter supply worries could resurface.”
The oil market saw a technical correction that contributed to the rebound in prices on Tuesday. The future direction of the market hinges on whether Israel expands its ground offensive in the region. The ongoing tensions in the Middle East remain a critical factor influencing oil prices as supply concerns persist.
