HOUSTON: Crude oil prices held steady on Tuesday as investors scrutinized summer driving demand and focused on US inflation data due this week.
Brent futures for August settlement were down 6 cents, or 0.07%, at $85.95 a barrel by 10:52 a.m. ET (1452 GMT). US crude futures were flat at $81.63.
Both benchmarks gained about 3% last week, marking two straight weeks of gains, and taking them to their highest since April. While US summer driving season is set to boost demand, high gasoline stocks and weak demand indicators have caused jitters in the market. However, recent draws in oil and fuel stocks have given investors some hope.
US crude oil and gasoline stockpiles were expected to have fallen while distillate inventories likely rose last week, a preliminary Reuters poll showed on Monday.
“Crude futures are correcting back from the highest levels since April as market conditions have entered an ‘overbought’ condition,” said Dennis Kissler, senior vice president of trading at BOK Financial.
“Near term, fuel demand along with geopolitical aspects will be the market mover,” Kissler added. Oil was also supported by continued Ukrainian attacks on Russian oil infrastructure. On June 21, Ukrainian drones hit four refineries, including the Ilsky refinery, one of the main fuel producers in southern Russia.
Worries of escalating tensions between Israel and Iran-backed group Hezbollah have also helped keep a floor on prices, analysts noted. Israeli forces killed at least 24 Palestinians in three separate airstrikes on Gaza City early on Tuesday, Gaza health officials and medics said.
More than eight months into the war, international mediation backed by the US has failed to yield a ceasefire agreement. Hamas says any deal must bring an end to the war and full Israeli withdrawal from Gaza, while Israel says it will accept only temporary pauses in fighting until Hamas is eradicated.
The US Federal Reserve meanwhile has reiterated that holding the policy rate steady “for some time” is likely to be enough to bring inflation under control. Delays to a US rate cut could hold back the economy and limit growth in fuel consumption.
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