(Bloomberg) — Oil steadied as investors juggled signs of tighter supplies with elevated tensions in the Middle East and a still-shaky demand outlook.
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Brent crude was above $82 a barrel after dropping 1.5% on Tuesday, while West Texas Intermediate traded near $77. OPEC+ producer Russia met its target for export cuts in January, complying with an earlier pledge to the group, according to government data. Chinese figures showed that while trips increased over the Lunar New Year holidays, tourists spent frugally.
Crude has remained in a $10-a-barrel trading range this year as the push and pull of bearish and bullish factors led to a decline in volatility. Attacks on ships in the Red Sea and the Israel-Hamas war have ramped up tensions in the Middle East and added a geopolitical risk premium to prices.
The most recent assault by Houthi militants in the vital waterway forced the crew to the abandon the vessel, underscoring the continued risks to security in the region. As well as unnerving crews, it will likely lead to more shipowners avoiding the Red Sea, adding to transport time and costs.
The prompt timespread for Brent has expanded in backwardation since December, signaling tightening supply. The spread was at 82 cents a barrel on Wednesday, compared with 29 cents at the start of the month.
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