biedexmarkets.com– Oil prices rose slightly in Asian trade on Tuesday, recovering some lost ground as focus remained squarely on renewed ceasefire talks between Israel and Hamas, while anticipation of key economic data this week kept sentiment subdued.
Crude markets saw some profit-taking on Monday, amid reports that Israel had withdrawn troops from some parts of Gaza, while also meeting with Hamas in Egypt for new ceasefire talks. But oil prices remained close to five-month peaks as reports showed that Israel-Hamas talks remained deadlocked, while uncertainty over Iran potentially opening up a new front against Israel also remained in play.
These factors kept crude buoyant on Tuesday. expiring in June rose 0.6% to $90.89 a barrel, while rose 0.6% to $86.0 a barrel by 20:51 ET (00:51 GMT).
Oil markets keep Middle East tensions in focus
Fears of worsening geopolitical conditions in the Middle East were a key point of support for crude over the past month, especially as Iran threatened military action against Israel over an alleged strike on an embassy in Syria.
The prospect of an immediate ceasefire between Israel and Hamas also remained fleeting, given that the two parties have failed to reach an agreement despite repeated efforts by the U.S. and its allies to broker peace.
Oil prices were supported by the notion that worsening conditions in the Middle East will disrupt production from the oil-rich region. Houthi strikes on vessels in the Red Sea have already disrupted some oil supplies.
Any more supply disruptions are likely to further tighten global oil markets. The outlook for oil markets was further tightened by the Organization of Petroleum Exporting Countries and allies recently maintaining its pace of production cuts until end-June.
Inflation data, rate signals also in focus
Anticipation of key inflation data from the U.S. and China limited any major moves in crude prices.
U.S. inflation data is due on Wednesday and is widely expected to factor into the Federal Reserve’s outlook on interest rates. The are also due on Wednesday.
Chinese and inflation readings are due on Thursday, and are expected to offer more cues on a deflationary trend in the world’s largest oil importer.
The readings are also expected to offer more cues on the Chinese economy after some positive purchasing managers index readings for March.