Oil prices rise on sustained Red Sea shipping tensions

Brent crude oil price news: Oil prices rose slightly in early Asian trade on Wednesday amid continued concerns around shipping disruptions in the Red Sea and escalating tension in the Middle East.

Brent crude rose 26 cents, or 0.4 per cent, to $76.11 a barrel by 0004 GMT, while US West Texas Intermediate crude futures rose 26 cents, or 0.3 per cent, to $70.64.

Oil prices had climbed around $2 earlier in the week following attacks on vessels in the Red Sea by Houthi rebels over the weekend and the reported arrival of an Iranian warship on Monday.

On Sunday, US helicopters repelled an attack by Iran-backed Houthi forces on a container vessel operated by Danish shipper Maersk (MAERSKb.CO) in the Red Sea. On Monday, an Iranian warship had entered the Red Sea, according to the semi-official Tasnim news agency.

Maersk and German rival Hapag-Lloyd (HLAG.DE) said their container ships would keep avoiding the Red Sea route that gives access to the Suez Canal.

A wider conflict could close crucial waterways for oil transportation.

A Reuters survey of economists and analysts predicted Brent would average $82.56 a barrel this year, up slightly from the 2023 average of $82.17, with weak global growth expected to cap demand. Geopolitical tensions, however, could support prices.

Keeping a lid on oil's gains are fading expectations of sharp US interest rate cuts in 2024 and worries about growth in the world's largest economy, which sent the market down in the previous session.

Ahead of weekly data on US oil stocks, analysts polled by Reuters expected crude stockpiles fell last week, while distillate and gasoline inventories likely rose.

Data from the American Petroleum Institute industry group is due at 4:30 p.m. (2130 GMT) on Wednesday, and data from the Energy Information Administration, the statistical arm of the US Department of Energy, is due at 11:00 a.m. (1600 GMT) on Thursday, delayed by a day due to the New Year's holiday on Monday.

Separately, OPEC+ plans to hold a meeting of its Joint Ministerial Monitoring Committee (JMMC) in early February, though an exact date has not been decided, three sources from the alliance said.