Brent crude futures added 30 cents or 0.36% to $82.64 a barrel, while U.S. WTI crude futures were 26 cents or 0.34% higher at $77.3
Oil prices rebounded in Asian trade on Wednesday amid concerns over attacks on shipping in the Red Sea and growing expectations that cuts to U.S. interest rates will take longer than anticipated.
Brent crude futures added 30 cents or 0.36% to $82.64 a barrel by 0324 GMT, while U.S. WTI crude futures were 26 cents or 0.34% higher at $77.3.
The Brent and WTI contracts dropped 1.5% and 1.4% respectively from near three-week peaks on Tuesday as the premium for prompt U.S. crude futures to the second-month contract more than doubled to $1.71 a barrel – its widest level in nearly four months.
That encourages energy companies to sell now instead of paying to store product for future months. The premiums slipped to 4 cents a barrel on Wednesday.
Crude futures prices have become relatively range-bound, and have at least $6-7 per barrel of risk premium embedded at current levels, said Vandana Hari, founder of Vanda Insights.
She said prices could remain range-bound until the next turning point in the Gaza crisis, whether that be a de-escalation or an exacerbation by Israel’s attack.
Attacks on vessels in the Red Sea have continued to stoke concerns over freight flows through the crucial waterway.
Meanwhile, Russia, which has pledged output cuts of 500,000 bpd as part of a package of cuts with OPEC+, said on Tuesday that it intends to fulfil its OPEC+ quota in February despite a drop in oil refining.
Concerns that rate cuts by the Fed could take longer than thought have weighed on the outlook for oil demand. U.S. inflation data last week pushed back expectations for an imminent start to the Fed’s easing cycle.
