FX.co ★ Oil Gains on Mideast Tensions

West Texas Intermediate (WTI) crude oil futures experienced a more than 1% increase on Tuesday, nearing $58 per barrel, as they rebounded from a two-day downtrend influenced by heightened tensions in the Middle East. On Monday, Israel conducted airstrikes targeting Yemen's Hodeidah port and a cement factory. This action was in retaliation for a ballistic missile attack by the Iran-supported Houthis, which struck Israel’s main airport the day before. The previous trading session witnessed a 2% drop in WTI crude prices triggered by concerns over surplus supply. This apprehension stemmed from OPEC+’s decision to accelerate production increases for the second month in a row. Saudi Arabia, the leading member of the cartel, cautioned about further production hikes if countries that are overproducing do not adhere to agreed-upon levels. The increased supply has exacerbated the downward pressure on oil prices, which are hovering near four-year lows, as the ongoing trade tensions between the U.S. and China persistently raise alarms about slowing global economic growth and a potential decline in energy demand.