Oil rises; markets weigh Red Sea attacks, US rate cuts
Brent crude futures rose 12 cents, or 0.15%, to $82.46 a barrel by 0100 GMT, while U.S. West Texas Intermediate crude futures (WTI) were up 9 cents, or 0.12% at $77.13.
The Brent and WTI contracts slipped 1.5% and 1.4% respectively on Tuesday.
Washington on Tuesday again vetoed a draft United Nations Security Council resolution on the Israel-Hamas war, blocking a demand for an immediate humanitarian ceasefire. The U.S. is instead pushing for the Security Council to adopt a resolution tying a ceasefire to the release of Israeli hostages by Hamas.
Attacks in support of the Palestinians on vessels in the Red Sea and Bab al-Mandab strait by Yemen’s Iran-aligned Houthis have continued to stoke concerns over freight flows through the critical waterway. Drone and missile strikes have hit at least four vessels since Friday.
Meanwhile, Russia, which has pledged output cuts of 500,000 barrels per day (bpd) as part of a package of cuts with Organisation of Petroleum Exporting Countries and its allies (OPEC+), said on Tuesday that it intends to fulfil its OPEC+ quota in February despite a decline in oil refining. Refinery throughput in Russia has fallen by 7% since the start of the year, the country’s energy minister said on Tuesday, after facilities were damaged by Ukrainian drone attacks. Concerns that rate cuts by the Federal Reserve could take longer than thought have weighed on the outlook for oil demand. U.S. inflation data last week pushed back expectations for an imminent start to the Fed’s easing cycle, with economists polled by Reuters now forecasting a cut in June.
U.S. crude inventories were seen up last week, while distillates and gasoline stockpiles were seen dropping, a preliminary Reuters poll showed on Tuesday.
Analysts polled by Reuters estimated on average that crude inventories rose by about 4.3 million barrels in the week to Feb. 16.
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