Oil Slips From Three-Month High After Another Red Sea Attack

(Bloomberg) -- Oil slipped from near the highest level in over three months as prices cool from the high end of the band they have been trading in all year. 

Brent traded near $83 a barrel after three days of gains, while US crude also retreated. Tensions in the Red Sea continue to simmer, with the crew of a ship abandoning the vessel after the attack on Sunday evening, the first such evacuation since the Yemen-based group started targeting ships late last year. 

But there have been few clearcut supply-and-demand catalysts, leaving crude futures trapped in a tight $10 range since the start of the year. Signs of poor consumption — most notably from top importer China — have been countered by geopolitical tensions and efforts by OPEC+ to trim output. However, the price difference between monthly contracts has been widening, indicating a more robust outlook in parts of the physical market. 

“The market is in a bit of a wait-and-see mode for now,” said Rob Thummel, senior portfolio manager at Kansas-based Tortoise Capital Advisors LLC. “The next thing traders are looking out for is what OPEC+ decides to do at their next output policy meeting.”

The group and its allies will decide in early March on whether to extend output cuts into the second quarter. The curbs got off to a slow start in January, with data compiled by OPEC showing that Iraq, the group’s second-largest producer, pumped more than its quota. The nation will improve its compliance after completing a review of external estimates of its production, Oil Minister Hayyan Abdul Ghani said in an interview in Cairo on Monday.

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