(Bloomberg) — Oil steadied — after rising almost 2% on Monday — as traders tracked tensions in the Middle East, and broader markets carried a risk-off tone.
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Brent was little changed above $74 a barrel, while West Texas Intermediate held near $71. Investors are waiting to see how Israel will retaliate against Iran for a recent missile barrage, as well as subsequent attacks by Tehran-backed proxies. In wider markets, Asian stocks were set to drop after US losses.
Crude has been buffeted this month — with global benchmark Brent swinging in a more-than-$11 range — as conflict in the Middle East has raised the potential for disruptions to supplies. At the same time, China has moved to support growth with stimulus, supporting prices, but investors remain wary that the global oil market may swing to a surplus in the coming quarters.
Brent’s prompt spread — the difference between its two nearest contracts — has narrowed in recent weeks, suggesting physical conditions are becoming less tight. The differential was 35 cents a barrel in backwardation, compared with 69 cents about a month ago.
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