Oil falls as supply concerns ease

Oil prices fell in a volatile session as investors weighed rising supply expectations against increased military activity in the Middle East. The United States and Britain launched more airstrikes against the Houthis on Monday to prevent the Iran-backed group from attacking commercial ships in the Red Sea. Despite rising geopolitical tensions, U.S. crude fell 0.5 percent to near $74 a barrel after hovering in a range below $2. A critical oil market barometer of supply and demand, known as the rapid spread, was supported by rising risks in the Red Sea. Front-month futures for global benchmark Brent crude are trading at a 44 cent premium to the next contract, near their highest since November excluding expiration dates. Despite the conflict in the Middle East and a pledge by the Organization of the Petroleum Exporting Countries to rein in output, crude has struggled to establish a clear direction this year. Oil’s gains were tempered by signs of ample non-OPEC production, with the International Energy Agency forecasting ample supplies. It has also restarted drilling from its largest field after flows in Libya stopped, and U.S. drillers are trying to shake off the effects of a freeze that has crippled operations.