Oil prices climb amidst Middle East tensions, Ukraine crisis

February 06, 2024 (MLN): Oil prices edged higher on Tuesday, extending gains from the previous session as the market assessed potential supply disruptions arising from tensions in the Middle East and Russia's ongoing invasion of Ukraine.

Brent crude is currently trading at $78.05 per barrel, up by 0.25% on the day.

While West Texas Intermediate crude (WTI) is trading at $73 per barrel, up by 0.28% compared to the previous close.

It is pertinent to note that both benchmarks recorded their highest weekly drop since October 2023, primarily attributed to demand concerns, despite the ongoing supply disruptions persisting in the market last week.

Traders have been closely following the situation in the Middle East, where progress on ceasefire negotiations between Israel and Hamas appeared elusive, indicating tensions in the oil-producing region are set to linger, as Reuters reported.

Blinken met Saudi Arabia's de-facto ruler on Monday. Palestinians hope the visit will clinch a truce before a threatened Israeli assault on Rafah, a border city where about half the Gaza Strip population is sheltering.

The ceasefire offer, delivered to Hamas last week by Qatari and Egyptian mediators, awaits a reply from militants who say they want more guarantees it will bring an end to the four-month-old war.

Brent crude futures were down 2 cents at $77.97 a barrel as of 00:01 GMT, while U.S. West Texas Intermediate crude futures edged down 3 cents to $72.75. Both contracts gained nearly 1% on Monday, rising for the first time in four sessions.

The United States continued its campaign against Iran-backed Houthis in Yemen, whose attacks on shipping vessels have disrupted global oil trading routes.

In Russia, two Ukrainian drones struck the largest oil refinery in the country's south on Saturday, a source in Kyiv told Reuters. It was the latest in a series of long-range attacks on Russian oil facilities, which has reduced Russia's exports of naphtha, a petrochemical feedstock.

Market participants awaited industry data due later on Tuesday on U.S. crude stockpiles.

Copyright Mettis Link News