Oil Up as Middle East Tensions Persist

(FILES) A picture taken on May 23, 2016 shows the ExxonMobil refinery in Notre-Dame-de-Gravenchon, northwestern France, on March 11, 2024. (Photo by CHARLY TRIBALLEAU / AFP)

Oil prices rose in Tuesday trade as geopolitical tensions in the Middle East continued to spur concern, but gains were limited on bearish demand sentiments and as the market waited for monthly reports from oil agencies.
Brent futures for May delivery was up 26 cents, or 0.3%, to $82.47 a barrel by 0408 GMT. The US crude April contract rose 17 cents, or 0.2%, to $78.10 a barrel, Reuters reported.
While the war between Israel and Palestinian group Hamas has not led to significant oil supply disruptions, Yemen's Iran-aligned Houthis have been attacking ships in the Red Sea and Gulf of Aden since November in what they say is a campaign of solidarity with Palestinians.
Airstrikes attributed to a US-British coalition hit port cities and small towns in western Yemen on Monday, while the Houthis said on Tuesday they had targeted what was described as the "US ship Pinocchio" in the Red Sea with missiles.
Capping gains however are the outlooks for weaker demand and increasing supply from producers outside of the Organization of Petroleum Exporting Countries (OPEC).
The International Energy Agency (IEA) expects oil supply to grow to a record high of about 103.8 million bpd, almost entirely driven by producers outside OPEC and its allies (OPEC+), including the United States, Brazil and Guyana.
Meanwhile, China's crude oil imports rose in the first two months of the year versus the same period in 2023, but they were weaker than the preceding months, continuing a trend of softening purchases by the world's biggest buyer.
In the meantime, the market is awaiting demand estimates from monthly reports by OPEC, the IEA and the Energy Information Administration, analysts from ANZ said in a note.
"While we believe the estimates will be largely unchanged, any upside surprise will ease demand concerns."