Red Sea concerns for oil

Oil held on for its biggest gain in more than a week as rising tensions in the Middle East and a new attack on shipping in the Red Sea prompted ships to avoid the key shipping route. Global benchmark Brent was trading around $81 a barrel after rising 2.5% on Tuesday, while U.S. crude traded above $75. The MSC United VIII ship was attacked en route from Saudi Arabia to Pakistan, even as the U.S. and several other countries set up a naval task force to deter attacks. The latest attack by Yemen-based Houthi militants and U.S. strikes on targets in Iraq are another sign that the Middle East risks escalating into a broader conflict that could destabilize it. “The ongoing conflict in the Red Sea is driving the rally,” said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova Pte. Oil is still on track for its first annual decline since 2020, but tensions have helped prices recover from lows earlier this month. There are widespread concerns about a glut next year despite new supply curbs from the Commonwealth of Petroleum Exporting Countries and its allies.