Latest Developments
Oil prices remained at three-month highs on Tuesday amidst ongoing attacks on shipping vessels in the Middle East region. West Texas Intermediate, the U.S. standard, saw a slight increase of 0.1% reaching $79.27, while Brent crude, the international standard, slightly decreased by 0.3% to $83.31. Both contracts have witnessed a 10% increase since the beginning of the year.
Factors at Play
The disruption caused by Houthi rebels in the Red Sea is impacting shipping routes, while conflicts between Israel and Gaza persist, posing threats to oil supplies. Additionally, China’s decision to lower a key interest rate for mortgages could potentially stimulate growth and energy demand in the country, the world’s second-largest economy.
Market Analysis
Susannah Streeter, head of money and markets at Hargreaves Lansdown, expressed that concerns over escalating conflicts in the Middle East are heightening worries about oil supplies from the region, particularly as tankers become targets.
However, there are factors limiting substantial increases in oil prices. While the U.S. has shown stronger-than-expected growth, China’s recovery remains sluggish. The Federal Reserve’s decision to delay interest rate cuts until later in the year will further constrain energy demand.
Stock Performance
Oil stocks saw minimal changes during this period. Exxon Mobil experienced a slight increase of 0.1% in the premarket, while Chevron added 0.4%. Occidental Petroleum also showed a 0.1% rise, whereas ConocoPhillips fell by 0.4%.