Oil prices climbed more than $1 on Tuesday, paring the previous day's loss as concern that an escalating Middle East conflict could hit supplies outweighed fear of a possible U.S. recession that could hurt demand in the world's biggest oil consumer.
Oil's slide was limited by worry that Iranian retaliation for the assassination of a Hamas leader in Tehran may lead to a wider war in the Middle East.
"Increased fear of escalating Middle East conflict prompted fresh buying," said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities .
"The market has largely factored in a retaliatory attack by Iran so the focus is on its scale and Israel's counterattack," Kikukawa said.
If the conflict escalates, oil prices will rise, but if it is contained in the short term - as it was in April amid similar escalation fear - gain will be limited, he said.
Persons:
paring, Hiroyuki Kikukawa, Kikukawa, Antony Blinken, Masoud Pezeshkian, Vladimir Putin
Organizations:
Brent, U.S, West Texas, NS, Nissan Securities, State Department, Reuters, OPEC
Locations:
Fort Stockton , Texas, Tehran, Iran, Israel, U.S, Iraq, Russia, Venezuela