© Reuters.
Investing.com– Oil prices moved little in Asian trade on Tuesday as traders awaited more developments in the Middle East, while a string of key economic readings due this week also kept markets on edge.
Markets were watching for any retaliation by the Iran-backed Houthi group for a series of strikes carried out by U.S. and UK forces last week, as well as any other signs of a spillover in the Israel-Hamas war. The Houthi Group told reporters that it will expand its targets in the Red Sea to include U.S. ships after the strike.
Fears of disruptions to Middle East supplies were a key point of support for oil prices in recent weeks, as several shipping operators steered clear of the Red Sea and the Suez Canal.
But prices saw limited upside on this trend, as concerns over wavering demand also remained in play, especially amid growing fears that global economic conditions will deteriorate further this year.
Record-high production in the U.S. and increased output by some members of the Organization of Petroleum Exporting Countries (OPEC) also indicated that oil markets will be less tight in early-2024 than initially expected.
expiring March rose 0.2% to $78.28 a barrel, while fell 0.1% to $72.64 a barrel by 20:01 ET (01:01 GMT).
Trading volumes were dull as a U.S. market holiday made for few cues.
US, Chinese economic data on tap
Markets were also cautious before a string of key economic readings this week, with Chinese fourth-quarter data due on Wednesday.
Economic growth in the world’s largest oil importer is expected to have surpassed the government’s 5% annual target. But the stronger growth figure is also expected to be driven by a weaker base for comparison in 2022.
While China imported record-high levels of crude in 2023, sustained economic weakness and high inventory levels are expected to reverse this trend in 2024.
Chinese and readings are also due on Wednesday.
In the U.S., and data for December was also due on Wednesday, with any strength in retail spending likely to factor into a stickier outlook for inflation.
Uncertainty over U.S. interest rates has also been a major point of contention for markets, especially as recent signs of resilience in inflation gave the Federal Reserve less impetus to begin cutting rates early.
The saw some strength on this notion, which weighed on oil prices. Focus this week is also on addresses by some Fed officials, which come before a central bank meeting at the end of January.
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