TOKYO/SINGAPORE- Oil prices rebounded by more than 1 percent on Tuesday, paring previous session’s losses, on supply concerns amid an escalating Middle East conflict, stronger US services sector data and a cut in production at Libya’s Sharara oilfield.
Brent crude futures gained 97 cents, or 1.27 percent , to $77.27 a barrel, while US West Texas Intermediate crude futures climbed $1.14, or 1.56 percent , to $74.08.
On Monday, both benchmarks fell about 1 percent against a backdrop of falling global stock markets.
Oil’s slide was limited by mounting concerns concerns that Iran, a key Middle Eastern producer, may retaliate against Israel and the US for the assassination of a Hamas leader in Tehran and an Israeli attack that killed a Hezbollah commander in Lebanon, potentially leading to a wider regional war.
On Monday, at least five US personnel were injured in an attack against a military base in Iraq, US officials told Reuters. It was unclear whether the attack was linked to the retaliation threats.
“Oil seems to have clawed back some of its losses as broader concerns of a possible escalation in Middle Eastern conflict continue to add (to) apprehensions in (the) oil market. The possibility of an all-out war in (the) Middle east is getting real, threatening global supplies,” Priyanka Sachdeva, a senior market analsyt at Phillip Nova in Singapore, said in an email.
The US has been urging countries to convey to Iran that escalation is not in its interest, a State Department spokesperson said on Monday.
