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Crude oil prices ended lower on Tuesday, failing to sustain early gains after an Iranian warship entered the Red Sea, raising fears of crude supply disruptions following attacks on shipping by part of the Iran-backed Houthi rebels in Yemen.
The dollar strengthened and stocks Prices mostly fell as investors tempered expectations about interest rate cuts.
Analysts said oil prices do not reflect rising tensions in the Middle East because traders are I'm not convinced that a major supply disruption is on the horizon..
First Month February Nymex Crude Oil Futures (CL1:COM) Closed -1.6% at $70.48/barrel.
ETF: (NYSEARCA:USE), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)
Despite falling oil prices, energy (XLE) is among the day's leaders in the S&P stock market sectors.
“The market is correcting to the extent that there have been no supply disruptions and they think it is unlikely that the Iranian warship will engage the American warships,” according to Andrew Lipow of Lipow Oil Associates, adding that the oil market would move higher if shot.
