Oil prices climbed on Tuesday on concerns that rising geopolitical tensions in Eastern Europe and the Middle East could lead to supply disruptions, recouping some of the losses from sharp losses the previous day.
Brent crude futures were up 48 cents, or 0.6%, at $86.75 a barrel by 0116 GMT, reversing a 1.8% drop in the previous session.
U.S. West Texas Intermediate (WTI) crude futures rose 34 cents, or 0.4%, to $83.65 a barrel, after falling 2.2% on Monday.
Oil prices hit a seven-year high last week, driven by tight global supplies and a recovery in global demand.
“The market tone stays strong, supported by heightening geopolitical risk,” said Chiyoki Chen, chief analyst at Sunward Trading.
“We saw profit-taking on Monday when the prices moved higher and as Wall Street temporarily sank amid concerns over the U.S. Federal Reserve’s policy to reduce economic stimulus, but buying appetite for oil remained solid,” he said.
A tumultuous day on Wall Street saw stocks end higher after posting heavy losses earlier in the day, as uncertainty over the rising geopolitical tensions and Fed policy boosted safe-havens.
NATO said on Monday it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets, in what Russia denounced as Western “hysteria” in response to its build-up of troops on the Ukraine border.
In the Middle East, Yemen’s Houthi movement, aligned with Iran, launched a missile attack at the United Arab Emirates on Monday that targeted a base hosting the U.S. military, but was thwarted by U.S.-built Patriot interceptors, U.S. and Emirati officials said.
Meanwhile, a draw in U.S. oil inventories also provided support, with crude inventories near the Nymex WTI delivery point in Cushing, Oklahoma, at their lowest levels since 2012.
Portfolio investors increased their long positions in oil for a fifth straight week as the worst of the latest wave of coronavirus infections passed and governments began to lift restrictions on business and travel.