Oil prices eased on Tuesday following an upturn earlier in the session that was driven by potential firming in crude demand and optimism over the Organization of Petroleum Exporting Countries (OPEC) and its allies possibly halting a supply boost this year.
Global benchmark Brent crude oil futures shed 0.12% to $84.15 per barrel after gaining 0.25% to $84.46 earlier. The US West Texas Intermediate (WTI) crude futures for August delivery traded 0.16% lower at $79.59 per barrel, having climbed 0.20% to $80.49 earlier in the session.
Brent and WTI futures rose about 2.00% on Monday to settle at their highest since April of $84.25 and $80.33 per barrel, respectively.
Ongoing geopolitical tensions in the Middle East have supported the risk premium in the market, as the possibility of an Israel-Hamas war involving other countries in the oil-rich region presented a potential global supply disruption.
The US Central Command (CENTCOM) stated on Monday that they have taken down four Houthi militant radars, along with aerial and surface sea drones, in the last 24 hours in the Yemeni areas controlled by the Iran-backed rebels.
The Houthis have been targeting and seizing ships crossing the crucial shipping pathway of the Red Sea in support of the Palestinians in the Gaza war.
Positive Demand Outlook, OPEC+ Plans Keep Oil Steady
Oil prices strengthened last week to log their first weekly rise in four weeks after OPEC+, the International Energy Agency (IEA), and the Energy Information Administration (EIA) expected demand to bolster in the second half of 2024, thereby aiding in reducing supplies.
Prices further surged on the producer group introducing the possibility that they might postpone or withdraw plans to increase supplies from the fourth quarter depending on market conditions.
Sentiment in oil markets has improved after OPEC+ unexpectedly announced plans for an output boost starting in October, with the prospect of firmer demand fueling crude prices.
In the week earlier, investors bought back some of the petroleum they sold the week prior.
Data from the Commodity Futures Trading Commission (CFTC) showed on Friday that hedge funds and money managers acquired about 80 million barrels in six major petroleum futures and options contracts in the week ending June 11.
The move undid around 40% of the 194 million barrels sold after OPEC+ announced plans to raise production.
