Oil stabilizes amid mixed indicators regarding supplies

Oil prices experienced minimal changes on Tuesday as traders grappled with conflicting data on supply and demand, amidst rising tensions in the Middle East and disruptions to production in the United States due to cold weather issues.

As of 03:53 GMT, Brent crude futures dipped by two cents to $80.04 per barrel, while US West Texas Intermediate crude futures saw a ten-cent decline to $74.75 per barrel. On Monday, both crude oil prices had increased by approximately two percent following a Ukrainian drone attack on Novatek’s Ust Luzha fuel export terminal, sparking concerns about supply disruptions.

Analysts anticipate that Novatek will likely resume operations at the terminal in the coming weeks, although loading docks were damaged. The attack raised concerns about the potential for the Russia-Ukraine conflict to escalate, particularly with key energy infrastructure being targeted.

In the Middle East, American and British forces conducted new strikes targeting Houthi facilities, including an underground storage site and missile and surveillance capabilities. Houthi attacks on ships in the Red Sea have disrupted global shipping, contributing to fears of inflation.

Despite ongoing geopolitical struggles, some analysts maintain optimism about near-term market fundamentals, citing the impact of severe weather on US oil production and escalating conflicts.

However, concerns about China’s economic recovery have weighed on markets, as worries persist about global oil demand. China is the world’s largest importer of crude oil, and sluggish domestic consumption has left oil traders uncertain about demand prospects. Chinese policymakers have implemented measures to support the economy, but consumption remains subdued.

The state’s pipeline administration reported on Monday that extreme cold and operational difficulties had halted 20 percent of oil production in the US state of North Dakota. Overall, market sentiment remains influenced by a complex interplay of geopolitical events, economic factors, and weather-related disruptions.