Oil rises on new Red Sea attacks

Oil rose on signs that U.S. crude inventories are falling and that more attacks on ships in the Red Sea have raised the risk of supply disruptions in the Middle East. Brent crude rose to $78 a barrel, while U.S. crude was above $72. The American Petroleum Institute said domestic inventories fell by 5.2 million barrels last week, while levels at Cushing’s also fell. Meanwhile, the Energy Information Administration forecasts a narrow global supply gap. Iran-backed Houthi rebels have launched new attacks on commercial shipping in the southern Red Sea, although no injuries or damage were reported. The ongoing incidents, despite the deployment of U.S.-led naval forces, are seen as a reflection of the Israel-Hamas war. Crude has been on a roller coaster since the start of the year, rising and falling daily as investors try to gauge the outlook for the coming quarters. The market has been supported by OPEC+ supply cuts, tensions in the Middle East, including in the Red Sea, and disruptions in Libya. Still, Saudi Arabia’s deep slide in official prices suggests underlying weakness. “A combination of factors surrounding developments in the Middle East, the supply outlook and slow global growth are driving this broader price instability,” said Yeap Jun Rong, market strategist at IG Asia.