Oil prices reversed losses to rise early Tuesday as concerns that energy demand will weaken competed against worries about attacks on tanker ships in the Red Sea.
West Texas Intermediate, the U.S. benchmark, rose 0.9%% to $73.32 a barrel after falling early. Brent crude, the international standard, added 1.2% to $79.12 a barrel. Both contracts are up more than 2% since the start of the year, but remain about 15% lower than three months ago.
There were fresh attacks on Western targets off the coast of Yemen on Monday and the Iran-backed Houthi rebels vowed to widen the scope of targets, The Wall Street Journal reported. At the same time, comments from central bankers suggesting that interest rates may stay higher affected expectations for the strength of the global economy in the next few months.
The conflict in the Middle East may have put a floor under prices, but the outlook for demand may also stop them from rising much, said Kelvin Wong, a strategist at Oanda.
“There are no clear catalysts to determine whether the bulls or bears are leading the oil market as conflicting factors are at play, thus causing a flux situation,” Wong wrote in a note Tuesday.
Separately, European oil major
Shell
agreed to sell its Nigeria onshore unit for about $2.4 billion to a consortium of companies. It has been trying to dispose of the business for several years.
The sale wasn’t enough to help the company’s share price.
Shell
‘s American depositary receipts were down 1.8% in premarket trading. Rival
BP
fell 1.3%.
Exxon Mobil
was up 0.2% and
Chevron
added 0.4%.
Write to Brian Swint at [email protected]
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