© Reuters. FILE PHOTO: An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China July 18, 2022. cnsphoto via REUTERS/File Photo
By Colleen Howe
BEIJING (Reuters) – Oil prices were little changed in Asian trading on Wednesday as weak demand and a recovery in supply limited the market’s reaction to mounting geopolitical risk.
The front-month March contract for inched up 5 cents to $79.60 a barrel as at 0138 GMT. U.S. West Texas Intermediate crude ticked up 7 cents to $74.44 a barrel.
“Weak demand amid ongoing supply risks kept hemmed in a tight range,” ANZ analysts said in a client note.
The prompt-month contract for Brent crude was trading at a 42 cent premium over the following month as geopolitical tension drove demand for nearer-term supply.
A coalition of 24 nations led by the U.S. and UK conducted new strikes against Houthi fighters in Yemen on Tuesday. The strikes were aimed at stopping the Houthis’ attacks on global trade, Britain said in a joint statement.
The U.S. said Iran-backed Houthis have mounted 26 attacks since late November on commercial shipping in the Red Sea, a shipping lane used by about 12% of global oil trade before the attacks.
The U.S. also carried out strikes against Iran-linked militia in Iraq on Tuesday, following an attack on an Iraqi air base that wounded U.S. forces.
But news that Libya had restarted oil exports and U.S. supply had started to recover from a recent cold snap limited price rises, ANZ analysts said.
Libya’s 300,000 bpd Sharara oilfield restarted on Jan. 21 after a protest-related pause since early January.
In the U.S., the third-largest oil-producing state of North Dakota brought some oil output back online after weather-related disruption, the state’s pipeline authority said. But output was still down as much as 300,000 barrels per day (bpd). In mid-January, output had weakened by as much as 425,000 bpd on extreme cold.