Key points:

  • Oil prices were mixed on Tuesday as overall economic concerns outweighed ongoing tensions in the Middle East.
  • Brent crude futures rose 3 cents, or about 0.04%, to $78.15 a barrel.
  • West Texas Intermediate crude fell 23 cents, or 0.32%, to $72.45 a barrel.

On Tuesday, oil prices were mixed as investors weighed concerns about the global economy against ongoing tensions in the Middle East. Brent crude futures, the international benchmark, rose slightly, while U.S. West Texas Intermediate crude fell.

Brent crude futures gained 3 cents to $78.15 a barrel. On Monday, prices fell 14 cents. West Texas Intermediate crude, the U.S. benchmark, declined 23 cents to $72.45 a barrel after the U.S. holiday on Monday.

What is affecting the price of oil now?

“Concerns about slowing economic growth have affected sentiment in the commodities complex. And this despite rising tensions in the Red Sea region,”

– ANZ analysts said in a client note.

Worries over China’s economic slowdown and the central bank’s decision to maintain interest rates dampened oil prices on Tuesday.

“Yesterday’s refusal by China’s central bank to cut its annual MLF rate dampened expectations of more pronounced stimulus from China’s top policymakers, which in turn led to lower oil demand, limiting further growth potential,”

-said OANDA senior market analyst Kelvin Wong.

Analysts also pointed to the intensifying cold snap in the United States, which could disrupt oil production and refinery operations.

North Dakota’s oil production has already fallen by 400,000 to 425,000 barrels per day due to harsh weather conditions.

Official oil inventory data from the U.S. Energy Information Administration (EIA) is scheduled to be released on Thursday, one day later than usual due to Monday’s federal holiday.

Threat of Houthi attacks persists

A growing number of oil tankers are avoiding the southern Red Sea due to disruptions caused by Houthi attacks, driving up shipping costs and lengthening transport times.

The Houthis, following US and British strikes on their facilities in Yemen, pledged on Monday to broaden their targets in the Red Sea region to include US vessels. The Houthi attacks, which they claim are intended to support the Palestinians in their conflict with Israel, have disrupted trade along the main East-West shipping route, which accounts for around 12% of global maritime traffic.

On Tuesday, LSEG vessel tracking data showed that four tankers used to transport Qatari liquefied natural gas (LNG) had resumed their voyages after being grounded for several days amidst maritime attacks by Yemen’s Iranian-linked Houthis in the Red Sea. The LNG tanker Al Rekayyat, data showed, resumed sailing in the Red Sea and is en route to Qatar after being halted on its Red Sea route since January 13.