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Oil prices experienced an uptick in early trading on Tuesday as concerns over supplies persisted amidst escalating geopolitical tensions in the Middle East.
Brent crude futures saw a rise of 25 cents, or 0.3 percent, reaching $82.65 per barrel by 0105 GMT. US West Texas Intermediate crude also increased by 31 cents, or 0.4 percent, reaching $77.09 a barrel.
On Monday, both contracts had fallen by over a dollar, primarily driven by growing worries about Chinese demand amid the deepening real estate crisis following a Hong Kong court’s order for the liquidation of the major real estate group, China Evergrande.
Despite the concerns about demand, analysts highlight that the market remains tense due to mounting worries about oil supplies. The recent deadly drone attack in Jordan by Iranian-backed militants, resulting in the first incident with American military personnel killed since the start of the Gaza war, has raised concerns. Additionally, an attack on a Trafigura oil tanker in the Red Sea over the weekend has increased the risks of supply disruptions, with a growing possibility of the US becoming involved in the conflict.
The rise in oil prices also comes ahead of the Federal Reserve’s interest rate decision. The Federal Open Market Committee is set to begin a two-day meeting on Tuesday, with expectations that policymakers will maintain interest rates at current levels. However, some investors believe there may be a shift away from the central bank’s inclination towards rate hikes.
In addition, a Reuters poll indicated expectations of a decline in US crude oil and distillate inventories for the past week, while gasoline inventories are anticipated to rise.
