Oil prices bounce back 1% on Tuesday

Oil prices rose by 1 per cent on Tuesday, recovering from the previous session’s losses due to supply concerns amid an escalating Middle East conflict, stronger US services sector data, and reduced production at Libya’s Sharara oilfield.

Brent crude futures increased by 76 cents to $77.06 a barrel, and US West Texas Intermediate crude futures climbed by 92 cents to $73.86.

The market had dropped about 1 per cent on Monday, influenced by falling global stock markets, but fears of a broader Middle East conflict involving Iran and potential impacts on oil supply limited further declines. The situation was heightened by recent attacks in the region and threats of retaliation.

The rebound in oil prices was also supported by data indicating a recovery in US service sector activity and a rally in Asian equity markets.

Concerns about production cuts at Libya’s Sharara oilfield, where output fell by 20 per cent due to protests, further contributed to the price increase. ING analysts noted that these production issues have helped offset earlier bearish market trends.

Attribution: Reuters