new york: Oil prices were little changed on Tuesday (January 16), under pressure as the dollar soared to a one-month high but buoyed by concerns over the impact of escalating tensions in the Middle East on energy supplies.
US West Texas Intermediate (WTI) crude oil futures settled at US$72.40 (RM339.41) per barrel, down 28 cents or 0.4% from Friday’s settlement price. U.S. markets were closed on Monday for the holiday.
Global benchmark Brent crude futures rose 14 cents (0.2%) from Monday’s settlement price to US$78.29 (RM367.02) per barrel. At a trading high, North Sea Brent futures rose $1 per barrel.
“Oil prices are looking for direction,” said Rob Tumel, managing director at energy investment firm Tortoise Capital.
The dollar hit a one-month high as investors dialed back expectations for a March interest rate cut by the US Federal Reserve, weighing on prices. A strong dollar reduces demand for dollar-denominated oil among buyers using other currencies.
Prices were also weighed down by the prospect of warmer weather in late January at major U.S. manufacturing sites, said Jay Hatfield, portfolio manager at InfraCap in New York.
Meteorologists predicted that the weather in the lower 48 states would go from colder than normal this week to near-warmer than normal from January 22 to 31.
Signs of escalating tensions in the Middle East supported oil prices after the US military carried out fresh strikes against four Houthi anti-ship ballistic missiles in Yemen.
Houthi attacks on Red Sea shipping have disrupted the movement of global goods through key trade routes.
“With tensions rising in the Middle East, the geopolitical risk premium for oil prices should rise as well,” Tummel said.
Iran’s targeted attacks in Iraq’s semi-autonomous Kurdistan region on Tuesday sparked a diplomatic row and raised fears of conflict spreading across the region. Iran also attacked Islamic State strongholds in Syria.
Citi Index analyst Fiona Cincotta said that despite the rise in oil prices, oil traders appeared to be waiting for hard evidence of supply disruptions before raising prices.
The CEO of global energy trader Gambar Group told Reuters on the sidelines of the World Economic Forum in Davos that he expects oil prices to remain at current levels and that the Red Sea He said he did not expect the disruption to have a major impact on oil production. – Reuters
