The unpredictability of OPEC+‘s voluntary output cutbacks, the ongoing tension in the Middle East, and the lackluster economic statistics from the United States all contributed to the relatively small fluctuations in oil prices on Tuesday.

A barrel of Brent oil increased by one cent to $78.02 at 04:02 GMT, while a barrel of West Texas Intermediate crude in the United States increased by five cents to $73.09 simultaneously.

According to Kelvin Wong, senior market analyst for Asia Pacific at OANDA, the market received some support from the comments made by Saudi Arabia’s energy minister, who stated that OPEC+ output curbs might extend into the first quarter of 2024 if necessary.

According to Tina Teng, an analyst at CMC Markets, an increase in the value of the United States dollar negatively influenced commodity prices in general, leading to a decrease in oil prices during the previous trading session. Traders were skeptical that supply curbs by OPEC and other countries would have a significant impact.

A stronger dollar often results in an increase in the price of oil for holders of other currencies, which may result in a decrease in oil demand.

On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, agreed on voluntary output cuts for the first quarter of 2024 that would total around 2.2 million barrels per day (bpd). Saudi Arabia will drive this agreement, as it will roll over its existing voluntary cut.

More than 1.3 million barrels per day (bpd) of those reductions, on the other hand, were an extension of the voluntary limitations that Saudi Arabia and Russia had previously implemented. The resumption of hostilities between Israel and Hamas, on the other hand, brought about supply concerns, as did the strikes on three commercial vessels that were operating in international waters in the southern region of the Red Sea.

Since the beginning of the conflict between Israel and the Palestinian terrorist group Hamas on October 7, these instances have followed a string of strikes that took place in the seas around the Middle East.

The tone of the oil market was dampened by the data released on Tuesday, which revealed that factory orders in the United States declined by more than economists predicted in October and by the most in over three years. According to economists, this provided support for the assumption that high interest rates are beginning to prevent expenditure from occurring.