Adedapo Adesanya
By Adedapo Adesanya
The crude oil market settled higher on Tuesday as geopolitical tensions continued in the Middle East and Eastern Europe, with Brent futures up by 77 cents or 0.94 per cent to trade at $82.77 per barrel as the US West Texas Intermediate (WTI) futures grew by 95 cents or 1.24 per cent to finish at $77.87 per barrel.
Conflict in the Middle East kept prices elevated as talks involving the US, Egypt, Israel, and Qatar on a Gaza truce ended without a breakthrough on Tuesday.
This came as calls grew for Israel to hold back on a planned assault on the southern end of the enclave of Rafah, crammed with over a million displaced people.
Fears of further escalation of the war also stoked worries about the oil supply outlook.
Yemen’s Iran-aligned Houthis have continued their attacks in the Red Sea, claiming solidarity with Palestinians and striking vessels with commercial ties to the US, Britain, and Israel.
Also, the US rejected Russian President Vladimir Putin’s suggestion of a ceasefire in Ukraine as he reportedly sent signals to the American government in 2023 in public and privately through intermediaries, including through Moscow’s Arab partners in the Middle East and others, that he was ready to consider a ceasefire in Ukraine.
Analysts say the ceasefire came at a time when US sanctions are finally starting to bite as countries back away from taking Russian supplies.
Meanwhile, gains were curtailed as investors reined in expectations for the US Federal Reserve interest rate cuts.
Consumer inflation stayed elevated last month signalling that US Federal Reserve policymakers are now expected to wait longer before cutting interest rates.
This could dampen economic growth and oil demand, and it also boosted the Dollar to three-month peaks, which reduces demand for oil among buyers paying in other currencies.
US crude oil inventories rose last week as data from the American Petroleum Institute (API) showed crude stocks rose 8.52 million barrels in the week ended February 9.
The Organisation of the Petroleum Exporting Countries (OPEC) stuck to its forecast for relatively strong growth in global oil demand in 2024 and 2025 and raised its economic growth forecasts for both years.
The producer group and allies including Russia, known as OPEC+, will decide in March whether to extend oil production cuts.
