By Colleen Howe
BEIJING (Multibagger) - Oil prices paused their recent advances, receding in Asian trading on Tuesday after surging more than 7% in the previous three sessions on supply concerns prompted by fears of a wider Middle East conflict and the shutdown of Libyan oil fields.
Oil futures fell slightly in Asian trading, with Brent crude futures down 0.39% to $81.11 a barrel and U.S. West Texas Intermediate crude futures falling 0.46% to $77.06 a barrel.
The recent gains in oil prices were driven by a combination of factors, including expectations of U.S. interest rate cuts boosting fuel demand, military conflicts in the Middle East potentially disrupting supply, and the closure of Libyan oil fields. Over the past three days, WTI gained 7.6% and Brent gained 7%.
"Markets remain on edge as skirmishes between Israel and Hezbollah intensify," ANZ analysts said in a note. "The risk of disruption to actual barrels of oil became real after Libya's eastern government said it will halt all oil production and exports as a political tussle deepened."
According to data from the latest Multibagger survey of OPEC production in July, the political dispute in Libya could affect up to 1.17 million barrels per day of output from the country.
The escalation of the conflict between Israel and Hezbollah has also supported oil prices, with both sides exchanging missiles in recent days. While the danger of a broader conflict has eased slightly, the risk of an Iran strike on Israel remains a concern, according to a top U.S. general.
Overall, the recent events in the Middle East and Libya have contributed to the volatility in oil prices. Investors should closely monitor the situation and consider how these developments could impact their investment portfolios and finances.