Oil futures moved lower on Tuesday morning as US traders returned from the Presidents Day holiday weekend, while the decline was seen limited by ongoing concerns over the Middle East as Iran-backed Houthi rebels continued to attack merchant ships.
The price moves
-
West Texas Intermediate crude oil with delivery in March CL.1,
-0.80% CLH24,
-0.80%
fell 32 cents, or 0.5%, to $78.75 a barrel on the New York Mercantile Exchange. -
April WTI CL00,
-1.52% CLJ24,
-1.52% ,
the most actively traded contract was down $1, or 1.4%, at $77.37 a barrel. WTI futures did not stabilize Monday due to the holiday, but closed Friday at the highest since Nov. 6 based on the front-month contract. -
April Brent crude oil BRN00,
-1.28% BRNJ24,
-1.28% ,
the global benchmark, was down 96 cents, or 1.2%, at $82.60 a barrel. -
March petrol RBH24,
-2.02%
lost 1.7% to $2.30 a gallon, while March heating oil HOH24,
-2.10%
it lost 1.3% to $2.72 a gallon. -
Natural gas for delivery March NGH24,
-0.50%
fell 1.7% to $1.58 per million British thermal units.
Market drivers
US crude oil futures were hovering around three-month highs on Tuesday morning as tensions continued to rise in the Middle East as various countries stepped up efforts to secure a ceasefire between Israel and Hamas in Gaza.
Yemen’s Houthi militants said they attacked the cargo ship Rubymar in the Gulf of Aden, news reports said. The ship was seen at risk of sinking. A US-led coalition has conducted a series of airstrikes against Houthi targets in response to drone and missile attacks in the region, which have forced shippers to avoid the Red Sea. The Houthis have vowed to continue their attacks.
March WTI crude expires on Tuesday, meaning there could be volatile price action as traders rush to exit positions in the immediate month, the StoneX energy team in Kansas City, led by Alex Hodes, said in a note to the client on Tuesday.
Market participants may also show renewed concern over potential supply disruptions, Ricardo Evangelista, senior analyst at ActivTrades, said in a note. “With demand concerns gradually declining and geopolitical tensions persisting, there is the potential for further oil price increases on the horizon,” he said.
Elsewhere, China made its biggest-ever cut to mortgage rates on Tuesday, in a bid by authorities to support the country’s struggling real estate sector.
Last week, U.S. crude futures settled at their highest level since early November, after Israel launched attacks in Lebanon and threatened to overrun the southernmost Gaza city of Rafah if the remaining hostages did not had been released by Hamas. Meanwhile, investors appeared to largely shake off worries about a batch of warmer-than-expected January inflation data and bearish oil demand growth forecasts from the International Energy Agency .