No need for urgent OPEC+ actions, oil prices rising: Russia’s Novak

Russian Deputy Prime Minister Alexander Novak said on Tuesday there was no need for immediate action from the OPEC+ group of leading oil producers, as oil prices were rising and the market was balancing out.

Oil edged lower after the United States announced the creation of a task force to safeguard Red Sea commerce from attacks by Iran-backed Houthis in Yemen, which have disrupted maritime trade and forced companies to reroute vessels.

Crude climbed nearly 2 percent on Monday after a Norwegian-owned vessel was attacked and BP said it had paused all transit through the Red Sea, raising concern over supply disruption.

About 12 percent of world shipping traffic passes through the Suez Canal.

Brent crude slipped 22 cents, or 0.3 percent, to $77.73 a barrel by 1310 GMT. US West Texas Intermediate crude for
January, which expires on Tuesday, was down 42 cents at $72.05 while the more active February contract lost 27 cents.

Though the attacks on shipping have boosted the geopolitical risk premium, “the actual effect on oil flows is likely to be limited,” said John Evans of oil broker PVM.

“The attacks have not hit anything that would interfere with production,” he said.

The United Kingdom, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles, and Spain are among nations in-volved in the operation.

Goldman Sachs analysts said the disruption is unlikely to have a large effect on crude and liquefied natural gas (LNG) prices because opportunities to reroute vessels suggest that production should not be directly affected.

Oil major BP has temporarily halted transit through the Red Sea and oil tanker group Frontline on Monday said its vessels would avoid the route — signs that the crisis was broadening to include energy shipments.

Also in focus this week will be the latest snapshot of US supplies. US crude inventories are expected to decline by 2.2 million barrels, a Reuters poll showed.

The first of the week’s two supply reports, from the American Petroleum Institute, is due at 2130 GMT.