Oil dips on Monday

Oil prices declined as investors weighed market risks against escalating ship attacks near Yemen.

Brent crude traded above $85 a barrel, while West Texas Intermediate (WTI) was below $81. Despite recent attacks on two vessels, with one abandoned and another moderately damaged, oil prices fell. Moreover, a coal carrier also sank recently due to heightened hostilities by Houthi militants in the region.

Asian equities dipped ahead of key inflation measures impacting interest rate bets. The dollar remained near its highest level since November, increasing commodity costs.

However, crude is still on track for a monthly gain, with rising US gasoline demand and strong air travel boosting the outlook. Brent’s prompt spread has strengthened, indicating a tightening supply.

“We remain supportive of the oil market, expecting a tighter balance in the third quarter,” said Warren Patterson, head of commodities strategy at ING Groep NV. “Speculators are increasingly positive on oil as we move into summer.”

Attribution: Bloomberg.