Oil futures moved higher on Tuesday, seeking a second straight gain and holding at their highest price in about two weeks as attacks on ships in the Red Sea fueled concerns about possible supply disruptions.
Price promotion
-
West Texas Intermediate Crude Oil for January Delivery CL.1,
+1.01% CLF24,
+1.01%
rose 51 cents, or 0.7%, to $72.98 a barrel on the New York Mercantile Exchange at contract expiration, remaining at the highest level since Dec. 4. WTI raw CLG24,
+0.99% ,
which becomes the first month at the end of the session, added 52 cents, or 0.7%, to $73.34. -
February Brent crude oil BRN00,
+1.17% BRNG24,
+1.17% ,
the global benchmark rose 96 cents, or 1.2%, to $78.91 a barrel on ICE Futures Europe. -
January petrol RBF24,
+1.06%
continued up 0.9% to $2.1773 per gallon, while in January heating oil HOF24,
+1.33%
rose 1% to $2.6999 per gallon. -
Natural gas for January delivery NGF24,
-4.23%
traded at $2.399 per million British thermal units, down 4.2%.
Market factors
Brent and WTI crude held at their highest levels in about two weeks, with the latest support prices linked to news that oil giant BP PLC BP,
B.P.,
said it was temporarily suspending shipments through the Red Sea.
“The escalation of geopolitical risks, reflected in regular hostile actions against merchant ships in the Red Sea by Houthi rebels, undoubtedly plays a role in the rise in oil prices in the short to medium term,” said Rania Gule Market Analyst at XS.com. in comments by email.
Read next year: Why oil may not return to $100 a barrel in 2024
Several shipping companies had previously announced they would pause shipments due to a series of drone and missile attacks by Houthi rebels, who largely control Yemen, since the start of the war between Israel and Hamas.
Read more: Attacks in the Red Sea add to global shipping problems
“As the festive season approaches, a stable outcome for the region appears elusive,” said Stephen Innes, managing partner at SPI Asset Management, in market commentary. “The longer the war in Gaza continues, the escalating humanitarian crisis could intensify political pressure on various actors, potentially leading to an expansion of the conflict.”
““The longer the war in Gaza continues, the escalating humanitarian crisis could intensify political pressure on various actors, potentially leading to an expansion of the conflict.” ”
And “amid missile attacks and bombings, the fog of war increases the likelihood of unpredictable events and significant miscalculations, potentially leading to further escalation,” Innes said.
Crude oil prices had risen modestly following Hamas’s October 7 attack on southern Israel on fears of a wider conflict, but quickly gave up those gains early last week to trade at about six-month lows before experienced a modest recovery.