Oil Prices Face Pressure Amid Geopolitical Crises and Economic Changes

Oil prices turned lower on Tuesday as investors balanced the impact of tensions in the Middle East against a rising dollar and declining expectations for U.S. interest rate cuts. Brent crude futures fell by 46 cents, or approximately 0.59%, to reach $77.69 per barrel by 1532 GMT. Earlier in the session, the contract had risen more than a dollar from its settlement price on Monday. Meanwhile, West Texas Intermediate (WTI) crude dropped by 90 cents, or 1.24% from Friday, to record $71.78 per barrel. U.S. markets were closed due to a public holiday on Monday. The escalation of the shipping crisis in the Red Sea and Iranian missile strikes on targets in Syria and Iraq have increased geopolitical risks, leading to a rise in oil prices on Tuesday. However, analysts say that prices are unlikely to surpass a certain threshold unless production is halted. Craig Erlam, an analyst at OANDA, stated, "Oil markets are still influenced by tensions in the Middle East, but the baseline scenario suggests no major disruptions to oil flows." Tamas Varga from PVM Oil Associates noted, "In the absence of a tangible and significant impact on oil production, prices will remain within the current range of $72 to $82."