Oil prices rose slightly on Tuesday. This increase followed a significant drop in the previous session. The U.S. plan to purchase oil for the Strategic Petroleum Reserve (SPR) offered some support. Meanwhile, investors remain focused on developments in the Middle East.
Brent crude futures gained 44 cents, or 0.6%, reaching $71.86 a barrel. Simultaneously, West Texas Intermediate crude climbed 45 cents, or 0.7%, to $67.83 a barrel. However, both contracts had fallen 6% on Monday. This decline marked their lowest levels since October 1.
On Monday, the U.S. announced plans to acquire up to 3 million barrels of oil for the SPR. This purchase is scheduled for delivery through May next year. However, this might limit the government’s ability to buy more until lawmakers approve additional funds.
"While the situation in the Middle East remains concerning, the market expects a temporary pause in retaliatory strikes," said Hiroyuki Kikukawa. He is the president of NS Trading, a unit of Nissan Securities.
Kikukawa noted that the U.S. plan to refill the SPR provided some support. However, he predicts a downward trend ahead. The peak winter kerosene demand season in the Northern Hemisphere is still some time away. Additionally, demand in China remains sluggish.
Recently, Israeli jets conducted multiple strikes against missile factories in Iran. This escalation continues to heighten tensions. While these attacks focused on military targets, concerns about potential strikes on oil infrastructure remain.
Tensions are still high. Iranian Foreign Ministry spokesperson Esmaeil Baghaei stated that Iran would respond to Israel's actions. The U.S. also warned at the U.N. Security Council of "severe consequences" for any further aggressive actions by Iran.
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Oil prices rise slightly as the U.S. plans to refill its Strategic Petroleum Reserve. Market reactions focus on Middle East developments and supply dynamics.
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