Geopolitical jitters, China lift oil to near 3-week peak

20 Feb 2024 , 08:21 AM

Early Asian trade on Tuesday saw minimal movement in oil prices, which were mostly stable near three-week highs due to rising Middle East tensions and improving Chinese demand.

Brent futures had dropped 8 cents to $83.48 per barrel. The price per barrel of U.S. West Texas Intermediate (WTI) crude for April delivery decreased by 10 cents to $78.36. In anticipation of the March WTI contract’s daytime expiration, traders saw a 26-cent increase to $79.45 a barrel.

The Houthis, who support Iran, have persisted in their attacks on Red Sea and Bab al-Mandab Strait maritime channels, destroying at least four more vessels with drone and missile strikes since Friday. Houthis reported that one of them, the British-registered, Lebanese-managed Rubymar cargo vessel in the Gulf of Aden, flowered under the flag of Belize and was in risk of capsizing, upping the ante in their effort to sabotage international trade in support of the Palestinians in Gaza.

During the country’s national Lunar New Year vacation, which concluded on Saturday, tourism sales increased 47.3% year over year and surpassed pre-COVID levels in China.

Additionally, in an effort to support its struggling economy and real estate sector, China lowered the standard reference rate for mortgages on Tuesday by a larger amount than anticipated.

The reasons that supported prices, however, did not totally eliminate concerns about demand. Expectations that renewable energy will replace the use of fossil fuels led to a pessimistic revision of the 2024 oil demand growth prediction in a report released last week by the International Energy Agency (IEA).

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