Crude oil prices remained stable on Tuesday as investors closely watched summer driving demand and anticipated U.S. inflation data expected later in the week.
By 10:52 a.m. ET (1452 GMT), Brent futures for August settlement had decreased by 6 cents, or 0.07%, to $85.95 a barrel. U.S. crude futures remained unchanged at $81.63.
Both benchmarks saw approximately a 3% rise last week, marking two consecutive weeks of gains and reaching their highest levels since April.
Despite the expected boost in demand from the U.S. summer driving season, high gasoline stocks and weak demand indicators have caused some market concerns.
However, recent reductions in oil and fuel inventories have provided some optimism for investors.
A preliminary Reuters poll on Monday indicated that U.S. crude oil and gasoline stockpiles likely fell while distillate inventories probably increased last week.
“Crude futures are correcting back from the highest levels since April as market conditions have entered an ‘overbought’ condition,” noted Dennis Kissler, senior vice president of trading at BOK Financial.
He added, “Near term, fuel demand along with geopolitical aspects will be the market mover.”
Oil prices have also been supported by ongoing Ukrainian attacks on Russian oil infrastructure.
On June 21, Ukrainian drones targeted four refineries, including the Ilsky refinery, a major fuel producer in southern Russia.
Additionally, concerns about escalating tensions between Israel and the Iran-backed group Hezbollah have helped maintain a floor on prices.
Israeli forces killed at least 24 Palestinians in three separate airstrikes on Gaza City early Tuesday, according to Gaza health officials and medics.
More than eight months into the war, international mediation efforts backed by the U.S. have yet to produce a ceasefire agreement.
Hamas insists that any deal must end the war and include full Israeli withdrawal from Gaza, while Israel is only willing to accept temporary pauses in fighting until Hamas is eradicated.
Meanwhile, the U.S. Federal Reserve has reiterated that maintaining the policy rate steady “for some time” is likely sufficient to control inflation.
Delays in a U.S. rate cut could slow the economy and limit growth in fuel consumption.
Investors are also focused on the upcoming release of the personal consumption expenditures index on Friday, the U.S. Fed’s preferred inflation measure, which will provide further guidance on how long the central bank might wait before reducing interest rates.