Oil rises as investors weigh Red Sea attacks, US rate cut outlook

NEW DELHI (Reuters) -Oil prices regained some ground in Asian trade on Wednesday amid concerns over attacks on shipping in the Red Sea and growing expectations that cuts to U.S. interest rates will take longer than thought. Brent crude futures increased 24 cents or 0.3% to $82.58 a barrel by 0721 while U.S. West Texas Intermediate crude futures (WTI) were up 21 cents or 0.3% at $77.25.

The Brent and WTI contracts fell 1.5% and 1.4%, respectively, from near three-week highs on Tuesday as the premium for prompt U.S. crude futures to the second-month contract more than doubled to $1.71 a barrel. Concerns regarding freight movements via the vital waterway have continued to be raised by attacks in support of the Palestinians by Yemen’s Houthis, who are affiliated with Iran, on vessels in the Red Sea and Bab al-Mandab strait. Since Friday, at least four vessels have been struck by missile and drone strikes.

Preliminary data from revealed on Tuesday that U.S. crude stocks were seen to have increased last week, while distillates and gasoline stockpiles were considered to have decreased. In the week leading up to February 16, analysts surveyed by predicted that oil stocks increased by an average of almost 4.3 million barrels.

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