Oil prices edged up slightly in early trade on Tuesday as market participants eyed US Secretary of State Antony Blinken’s visit to the Middle East for talks to end the conflict in the region.
Antony Blinken met with the king of Saudi Arabia on Monday. Palestinians hope a truce will be reached because Israeli forces are in danger of attacking Rafah, a border town with Egypt where about half of Gaza’s residents are taking refuge. A truce proposal handed to Hamas last week by Qatari and Egyptian mediators awaits a response from the fighters, who want more assurances that it will end the four-month war.
Brent crude futures were up 17 cents, or 0.22%, at 78.16 USD per barrel, while US West Texas Intermediate (WTI) futures were up 15 cents, or 0.21%, at 72.93 USD per barrel. Both benchmarks rose nearly 1% on Monday, recording their first daily gains in four sessions.
The United States continued its campaign against the Iran-backed Houthis, whose attacks on merchant ships have blocked passage along some key global oil trade routes.
In Russia, two Ukrainian drones struck the country’s largest oil refinery in the south on Saturday, a source in Kiev told Reuters. It was the latest in a series of attacks on Russian oil facilities that have affected Russian oil exports.
Market participants await US crude stockpiles data due later on Tuesday, with five analysts polled by Reuters seeing crude inventories rise by about 2.1 million barrels in the week of February 2.
Meanwhile, Saudi Arabia kept the price of its main crude on hold for March as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) cut output to prevent a market glut. At the beginning of March, OPEC+ must decide whether to extend the cuts into the second quarter.
“We expect the group to at least partially extend its cuts into next quarter, which should keep the market balanced and ensure prices remain at around 80 USD per barrel”, said Warren Patterson, head of commodities strategy at ING.
