Oil prices were slightly lower on Tuesday after climbing more than 4 percent in the previous session on fears of potential supply disruptions amid military clashes between Israel and the Palestinian Islamist group Hamas.
Benchmark Brent crude futures slipped 0.2 percent to $87.94 a barrel, while WTI crude futures were down 0.2 percent at $86.16.
There is still plenty of uncertainty regarding the geopolitical ramifications of the ongoing conflict in the Middle East.
The latest events in Israel don’t pose an immediate threat to oil supply as the country produces very little crude oil.
However, it is feared that tightened sanctions on Iran and subsequent disruptions to Iran’s oil supply would have more of an impact on oil markets, if the conflict is protracted in duration.
The United States has no intelligence or evidence that points to Iran’s direct participation in the attacks, a White House spokesperson said on Monday.
Meanwhile, Israel’s port of Ashkelon and its oil terminal have been shut in the wake of the conflict.
Investors also await the latest inventory reports along with a series of economic and trade data, including U.S. inflation and China credit and trade data, due to be released this week for clues to the outlook for growth.