Oil prices experienced a slight uptick in Asian trade after rebounding from six-month lows due to attacks in the Red Sea. Yemeni Houthi group’s missile strikes led shipping firms, including BP PLC and Frontline Ltd, to avoid the Suez Canal, impacting crude supplies to Europe and Asia. Prices rose on Monday but maintained mild strength on Tuesday, with Brent oil at $78.11 a barrel and West Texas Intermediate at $72.93 a barrel.

The conflict’s escalation has traders monitoring the Middle East for potential supply disruptions. Recent Houthi attacks, including strikes on U.S. Navy vessels, were in retaliation for Israeli actions in Gaza. The U.S. vetoed a UN ceasefire resolution, causing criticism and raising the risk of drawing other Middle Eastern powers into the conflict.

Russia’s decision to deepen oil export cuts supported prices, but oversupply concerns tempered gains. Despite production cuts by OPEC+ and strong U.S. production, the market is expected to be less tight in 2024, leading to Goldman Sachs lowering its Brent price expectations to $70-$90 a barrel.

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Conclusion:

The Red Sea conflict’s repercussions on oil supplies highlight the need for risk mitigation strategies. Stay informed, seek expert advice, and explore 4xPip‘s offerings for a robust trading experience