Oil Up As Middle East Issues Eclipsed By Economics

Meanwhile, proposed Iran sanctions fail to impress traders: file image/Pixabay

Oil prices were on the rise Tuesday as of 16:37 GMT, thanks to favourable global economics that saw Eurozone activity expand.

Brent rose $1.04, or 1.2 percent, to $88.04 per barrel by 16:37 GMT, while West Texas Intermediate rose $1.10, or 1.3 percent, to $83.00 per barrel.

Oil was also supported by the expectation of slowing manufacturing activity that would in turn accelerate interest rate cuts and boost demand; this came in the wake of news from S&P Global that U.S. manufacturing activity hit a four month low of 49.9 in March (a reading below 50 indicates that activity is contracting).

Phil Flynn, senior market analyst at the Price Futures Group Inc., said the hope for rate cuts are "giving oil a new sense of life here, especially after it's already sold off quite a bit."

Meanwhile, the oil market reportedly brushed off the threat of additional U.S. sanctions against Iran oil as the U.S. senate will vote on legislation broadening sanctions later this week.

Helima Croft, commodities strategist with RBC Capital Markets, told media that with regard to consumer prices at least,  "It's a U.S. election year, and the U.S. is going to do absolutely anything in its power to make sure prices don't go up."

In other oil news on Tuesday, Galp Energia of Portugal announced that the first phase of its exploration in the Mopane field in offshore Namibia could contain at least 10 billion barrels of oil; Citi labeled Galp's latest test results as close to a best-case scenario and called the discovery "totally transformational" for the company.

Also on Tuesday, oil and gas giants including Shell and TotalEnergies were reportedly in discussions to buy stakes in the new LNG export project of the United Arab Emirates (UAE), according to anonymous sources.

The Ruwais LNG project is being developed by state-owned ADNOC and will consist of two 4.8 million metric tonnes per annum LNG liquefaction trains with a total capacity of 9.6 million metric tonnes per annum.