Oil prices rose early in Asian markets on Tuesday, paring some of the previous day’s losses as investors worry over escalation of the Israel-Hamas war into a larger conflict and a possible halt to oil exports from the region’s oil exporters.
Brent crude futures were trading at $90.53 a barrel, up 70 cents, or 0.8 percent, by 0032 GMT, while U.S. crude futures West Texas Intermediate (WTI) was up 71 cents, or 0.8 percent, at $86.20 a barrel.
“The market is up on an adjustment after a drop in the past two sessions and on nagging fears of possible supply disruptions in the Middle East,” Yuki Takashima, economist at Nomura Securities said.
Both benchmarks fell more than 2 percent on Monday as diplomatic efforts to end the conflict between Israel and Hamas, the world’s biggest oil supplier in the Middle East, eased investor concerns about supply disruptions.
Hamas announced on Monday that it had released two Israeli women, among more than 200 hostages taken hostage in a terrorist operation, October 7.
According to sources, the United States has advised Israel to stop ground attacks on the Gaza Strip. But Israel continued its bombardment of the Gaza Strip on Monday after carrying out airstrikes in southern Lebanon overnight.
Israel began air strikes on hundreds of targets in the Gaza Strip on Monday as Gazan soldiers battled Hamas militants in attacks on the besieged Palestinian enclaves, where the death toll is rising and civilians are living in squalid conditions.
“We expect WTI to move within the $80-$90 range for a while, with all eyes on the situation in Israel and Gaza, OPEC production and the pace of demand recovery in China,” Takashima said, adding investors were also focusing on US inventory data.
US crude oil inventories were expected to rise last week, while distillates and gasoline stocks were expected to fall, according to a preliminary Reuters poll on Monday.
The survey was conducted ahead of the report due at 2030 GMT on Tuesday and at 1430 GMT on Wednesday by the American Petroleum Institute, an industry group within the Energy Information Administration (EIA), the statistics division of the US Department of Energy.
