Oil prices witnessed little change during Asian trading on Tuesday, with investors focusing on geopolitical tensions in the Middle East and optimism that the Federal Reserve (the US central bank) will soon begin lowering interest rates, which will contribute to higher global economic growth and boost demand.
Price action
Brent crude futures fell 26 cents, or 0.3 percent, to $79.13 per barrel by 0115 GMT, while the price of US West Texas Intermediate crude reached $73.59 per barrel, up three cents.
The volume of transactions is weak, given that some markets are still closed for the Christmas holiday.
Both benchmarks gained about three percent last week after Houthi attacks in Yemen on ships disrupted global shipping and trade, increasing tensions in the Middle East as the conflict between Israel and Gaza continues.
The Danish company Maersk said on Sunday that it is preparing to resume shipping operations through the Red Sea and the Gulf of Aden, indicating the start of a US-led military operation aimed at ensuring the safety of trade in the region.
Shipping companies had stopped the passage of ships through the Red Sea leading to the Suez Canal, through which about 12 percent of global trade passes, and imposed additional fees for changing the course of ships.
Separately, on Monday, Iran denied an American claim that a drone launched from its territory struck a chemical tanker in the Indian Ocean.
The Pentagon said over the weekend that the Liberian-flagged ship Kim Pluto, owned by Japan and operated by the Netherlands, was bombed 200 nautical miles (370 kilometers) off the coast of India.
Oil prices also received support from expectations that the US Federal Reserve will cut interest rates next year after US data released on Friday showed, by some key measures, that inflation is now at or below the central bank’s target of two percent.
Lower interest rates reduce consumer borrowing costs, which can boost economic growth and demand for oil.
