©Reuters. FILE PHOTO: Oil pump jacks, also known as thirsty birds, extract crude oil from the Wilmington Field oilfield area near Long Beach, California, July 30, 2013. REUTERS/David McNew/File Photo/File Photo
By Colleen Howe
BEIJING (Reuters) – Oil prices rose on Tuesday to near three-week highs as tensions in the Middle East rose and Chinese demand recovered.
futures rose 3 cents to $83.59 a barrel at 0757 GMT.
U.S. West Texas Intermediate (WTI) crude for April delivery rose 2 cents to $78.48 a barrel. The March WTI contract rose 24 cents to $79.43 a barrel as traders prepared for the contract to expire later in the day. No WTI deals were made on Monday due to a public holiday in the United States.
Crude oil markets were “marginally lower” in “quiet trading over the Presidents’ Day holiday in the United States and as demand concerns offset current geopolitical tensions in the Middle East,” the oil company said in a note. IG market analyst Tony Sycamore.
The Iran-aligned Houthis have continued their attacks on shipping lanes in the Red Sea and Bab al-Mandab Strait, with at least four more ships hit by drone and missile strikes since Friday. One of them, the Belize-flagged Rubymar cargo ship, registered in Britain and operated by the Lebanese in the Gulf of Aden, was in danger of sinking, the Houthis said, raising the stakes in their campaign to disrupt shipping global in solidarity with the Palestinians in Gaza.
“Signs of stronger demand in China also strengthened sentiment,” analysts at ANZ wrote in a note.
China’s tourism revenues rose 47.3% year-on-year and increased from pre-COVID levels during the Lunar New Year national holiday that ended on Saturday.
China also made a record cut in its benchmark mortgage rate on Tuesday, in a bid to support its beleaguered property market and economy.
However, price support factors did not fully offset demand concerns. A bearish report from the International Energy Agency (IEA) last week revised down its oil demand growth forecast for 2024 on expectations that renewable energy would displace the use of fossil fuels.