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Investing.com– Oil prices moved little in Asian trade on Tuesday, as markets weighed a weak outlook for demand against worsening geopolitical conditions in Russia and the Middle East, which could potentially disrupt supplies.
A dearth of major cues also made for little price action, as U.S. markets were closed for a holiday on Monday. Oil prices also had a muted session on Monday.
While crude prices had a strong run-up over the past two weeks, they appeared to have largely stalled in recent sessions as traders grew increasingly pessimistic over the outlook for demand.
Strong U.S. inflation data saw traders further price out the prospect of early interest rate cuts by the Federal Reserve, while the International Energy Agency warned of slowing global crude demand in the coming year.
Fourth-quarter recessions in the UK and Japan also further soured the demand outlook.
expiring in April fell 0.1% to $83.45 a barrel, while fell 0.2% to $78.34 a barrel by 21:15 ET (02:15 GMT). Both contracts were close to a three-week high.
Prices remained underpinned by persistent concerns over supply disruptions in the Middle East, as the Yemeni Houthis continued to clash with U.S. forces, while the Israel-Hamas war raged on.
An escalation in the Russia-Ukraine war, as Moscow took control of the city of Avdiivka, also raised concerns over potential supply disruptions along the Black Sea.
Fears of increased supply disruptions have been the biggest driving force for oil prices in recent weeks, although prices are still trading well below highs hit in early-2022. Concerns over slowing demand also saw crude prices clock a 10% decline through 2023.
China offered some positive cues on demand, as travel spending surpassed pre-COVID highs during the week-long Lunar New Year holiday.
China’s central bank also unexpectedly cut its on Tuesday, unlocking more liquidity for domestic markets.
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