Oil rose more than 2% on Tuesday, reaching its highest level this month, as renewed attacks on ships in the Red Sea raised fears of shipping disruptions and hopes of interest rate cuts that could boost growth. economy and fuel demand.
Brent crude futures closed up $2, or 2.5%, at $81.07 per barrel, after rising as much as 3.4% during the session. U.S. West Texas Intermediate crude rose $2.01, or 2.7%, to $75.57.
The rally, amid weak trading with some markets closed for holidays, added to gains of about 3% last week after Houthi attacks on ships worried investors and as violence in Gaza showed no signs of abating.
Yemen’s Iran-backed Houthi militia claimed responsibility for a missile attack on Tuesday on a container ship in the Red Sea, and for an attempt to attack Israel with drones.
Despite concerns about the Middle East and the rerouting of ships, actual supplies have not yet been affected.
Maersk on Sunday announced the restart of shipping routes through the Red Sea, while France’s CMA CGM is increasing the number of ships traveling through the Suez Canal, alleviating concerns to some extent.
U.S. crude oil inventories are expected to have fallen by about 2.6 million barrels in the week ending Dec. 22, while distillate and gasoline stocks are likely to have risen, a preliminary Reuters poll showed.