Oil prices rose on Tuesday, and analysts said uncertainty would keep prices high, even though there are currently no concrete signs of any production losses caused by the Iranian-Israeli conflict, Reuters reports, writes UNN.
Details
Brent crude futures rose 82 cents, or 1.1%, to $74.05 a barrel by 08:40 GMT (11:40 Kyiv time). U.S. West Texas Intermediate crude rose 77 cents, or 1.1%, to $72.54.
Both brands rose more than 2% earlier in the trading session, but fell before recovering in volatile trading.
Iran is the third largest producer among OPEC members, and there are widespread fears that hostilities could affect exports from the country. In addition, investors are monitoring for signs that supplies through the Strait of Hormuz, through which about 19 million barrels of oil and petroleum products are transported daily, could be disrupted.
"The market is largely concerned about disruptions in the Strait of Hormuz, but the risk of this is very low," said Saxo Bank analyst Ole Hansen.
There is no desire to close it, as Iran will lose revenue, and the US wants to lower oil prices and wants to lower inflation, he added.
There was no sign of loss of supplies, but ships moving in the area of the strait and the bay were affected by electronic warfare measures that disrupted navigation systems, the publication writes.
Early on Tuesday morning, shipping sources reported that a ship collided with two other ships passing near the Strait of Hormuz, highlighting the risks for companies transporting oil and fuel in the region.
Despite the possibility of disruptions, there are signs that oil supplies remain sufficient amid expectations of lower demand.
In its monthly oil report published on Tuesday, the International Energy Agency (IEA) revised down its estimate of global oil demand by 20,000 barrels per day compared to last month's forecast, while increasing its supply estimate by 200,000 barrels per day from last month's estimate to 1.8 million barrels per day.
Investors are also focused on central bank interest rate decisions, PVM Associates analyst Tamas Varga said in a note, and the U.S. Federal Open Market Committee, which manages Federal Reserve rate changes, is due to meet later on Tuesday.