Oil prices rose on Tuesday after an attack by the Houthi group on a chemical tanker caused an increase in “geopolitical” tensions in the Middle East against the backdrop of Israel’s war on Gaza, but fears of slowing demand growth and an excess of supplies undermined the gains.
A cruise missile launched from Yemen hit a commercial tanker, causing fire and damage but no casualties.
By 10:20 GMT, Brent crude futures for next February delivery rose by 0.2% to $76.16 per barrel, while US West Texas Intermediate crude futures for January delivery rose by 0.2% to $71.5 per barrel. However, prices reduced some of their gains later.
Tamas Varga of brokerage BVM said that although the attack on the ship helped raise oil prices, “sentiment remains negative… as there is no support coming from the demand side of the oil equation.”
A state of caution prevails among investors ahead of the publication of a major inflation report in the United States, which will be followed by a decision on interest rates.
Attention is also turning to the COP28 UN climate change conference talks, where negotiators are awaiting a new draft agreement on the future of fossil fuels.
The Houthi group said that they carried out a military operation targeting the commercial tanker Strinda, which was flying the Norwegian flag and was on its way to Israel via the Red Sea.
The Houthi group had previously pledged to target every cargo ship heading to Israel, regardless of its nationality or the party that runs it, in solidarity with the Gaza Strip, which has been subjected to Israeli aggression for the 67th day.
It is noteworthy that the Danish shipping group IB Moller-Maersk had imposed additional risk fees on container shipments to Israel to cover the increased insurance premiums. Due to the security situation starting early next year.
