WTI consolidates near $71.10 after recent losses, eyes on Israel-Gaza conflict

West Texas Intermediate (WTI) price hovers near $71.10 per barrel during the Asian session on Tuesday. The Crude oil prices move sideways after recent losses registered in the previous session.

The geopolitical conflict between Israel and Gaza is a significant factor influencing the dynamics of Crude oil prices. Such geopolitical tensions in the Middle East have historically contributed to concerns about potential disruptions in oil supply, leading to volatility in oil markets. The possibility of the conflict escalating into a regional crisis adds to the uncertainty surrounding oil prices.

Additionally, the Iran-backed Houthis escalates supply concerns by attacking container ships in the Red Sea. Such provocative actions, especially in maritime routes, have the potential to disrupt oil supply and impact market sentiment.

The warning issued by US Secretary of State Antony Blinken regarding the Gaza conflict highlights the broader implications of the situation. Blinken's visit to Tel Aviv to discuss with Israeli officials talks with Arab leaders reflects diplomatic efforts to address and find a resolution to the ongoing conflict.

However, the rise in the Organization of the Petroleum Exporting Countries and its allies (OPEC+) output reported on Monday, reflecting an increase of 70,000 barrels per day (bpd) in December, appears to have contributed to the depreciation of crude oil prices.

Furthermore, Saudi Arabia's decision to reduce the February Official Selling Price (OSP) of its flagship Arab Light crude to Asia, marking the lowest level in 27 months, is a strategic move with significant implications for oil markets. This decision reflects Saudi Arabia's efforts to remain competitive in the global oil market.