Oil prices rose in the Asian trading session on Tuesday, October 31, after declining by more than three percent in the previous session, due to concerns about oil supplies amid weak data from China.
At 03:05 GMT, Brent crude oil futures for December delivery, expiring on Tuesday, rose by 36 cents, or 0.41 percent, to $87.81 per barrel. The more actively traded January Brent crude oil futures increased by 29 cents, or 0.34 percent, to $86.64 per barrel. U.S. West Texas Intermediate (WTI) crude oil gained 34 cents, or 0.41 percent, to reach $82.65 per barrel.
Declined by more than 3%.
Oil prices had fallen by over three percent on Monday as investors became cautious ahead of the Federal Reserve (U.S. central bank) meeting on Wednesday, despite escalating Israeli attacks in Gaza.
According to Leon Li, an analyst at CMC Markets in Shanghai, despite Israel launching a ground attack, they quickly withdrew, and Iran has resorted to verbal responses. He added that if the situation were to escalate into a large-scale invasion involving Iran, concerns about supply shortages might resurface.
Analysts at IHS Markit emphasized the significance of disruptions to Iranian oil flows on the market, suggesting that such supply shortages could range from 500,000 to 1 million barrels per day if the United States were to reimpose strict sanctions.
Negative Chinese industrial and non-industrial activity data affected concerns about a slowdown in fuel demand from the world's second-largest oil consumer. The official Chinese Purchasing Managers' Index (PMI) fell below the 50-point threshold, indicating contraction.
Oil prices also received support from concerns about oil exports from Venezuela, given the uncertainty surrounding elections. Analysts at IHS Markit predicted that the suspension of the preliminary presidential election results for the opposition in Venezuela this month would raise questions about the future of U.S. sanctions on the country. They noted that Washington had recently decided to ease sanctions in exchange for a commitment to hold more transparent elections in 2024.
Markets are also awaiting the Federal Reserve's meeting, which influences domestic fuel demand, despite the likelihood of interest rates remaining unchanged, according to a survey conducted by CME Group's FedWatch tool.
