– Oil rose 3% last week
– Hapag-Lloyd to decide on Wednesday about Red Sea routes
– Iran denies US claim it targeted tanker near India
– Trade thin because some markets closed for public holiday
London — Oil steadied on Tuesday, finding support from geopolitical tensions in the Middle East and investor optimism that the U.S. Federal Reserve would soon start cutting interest rates, boosting global economic growth and fuel demand.
While hopes of rate cuts and conflict in the Red Sea have led to a rebound in crude prices, Maersk’s announcement of a restart of shipping routes through the waterway has alleviated supply concerns to a certain extent, said CMC Market analyst Leon Li.
Brent crude futures rose 10 cents, or 0.1%, to $79.17 a barrel by 0930 GMT while U.S. West Texas Intermediate crude slipped 25 cents, or 0.3%, to $73.31.
Trade is thin because some markets are closed for public holidays.
Both oil benchmarks registered gains of about 3% last week after Houthi attacks on ships disrupted global shipping and trade while the Israel-Hamas conflict shows no sign of easing.
Shipping companies had stopped sending vessels through the Red Sea and imposed surcharges for re-routing ships. The Red Sea connects with the Suez Canal, a major shipping route used for about 12% of global trade.
Maersk’s statement on Sunday cited deployment of a US-led military operation designed to ensure the safety of commerce in the area.
Germany’s Hapag-Lloyd will decide on Wednesday how it will proceed with its Red Sea routes after suspending shipments there, a spokesperson said on Tuesday.
Separately, Iran on Monday denied a U.S. claim that a drone launched from Iran had struck a chemical tanker in the Indian ocean. The Pentagon had said that the ship was hit 200 nautical miles (370 km) off the coast of India.
Oil also found support from expectations that the Fed wil cut interest rates next year after U.S. data on Friday showed that, by some key measures, inflation was now at or below the central bank’s 2% target.
Lower interest rates cut consumer borrowing costs, which can boost economic growth and demand for oil.
*Alex Lawler & Florence Tan, editing: David Goodman – Reuters
