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Oil futures were mixed early Tuesday, struggling to overcome selling pressure tied to continued volatility in financial markets as the Federal Reserve begins a two-day policy meeting.
West Texas Intermediate crude for March delivery
CL00,
CLH22,
fell 19 cents, or 0.2%, to $82.12 a barrel on the New York Mercantile Exchange. March Brent crude
BRN00,
the global benchmark, was up 4 cents, or less than 0.1%, at $86.31 a barrel on ICE Futures Europe.
Crude futures fell sharply on Monday as the commodity appeared to get caught up in a sharp stock-market selloff that, at its session lows, saw the Dow Jones Industrial Average
DJIA,
drop more than 1,100 points and the S&P 500
SPX,
down 4% before roaring back in late trade to end the day in positive territory.
U.S. stock-index futures pointed to renewed pressure on equities Tuesday, however.
“The outlook for oil is still bullish right now as inventories are seen rising by a smaller amount than initially thought as surplus estimates are dialed back given lower production and better demand conditions,” wrote analysts at Sevens Report Research, in a note. “Near term, expect oil to remain volatile with other risk assets as Fed policy uncertainty continues to push and pull this market around.”
Traders continue to keep an eye on rising tensions over Ukraine and the threat of a Russian invasion of its neighbor. The threat of a conflict is seen adding to broad market jitters, while carrying the potential to spark significant volatility in energy prices given Russia’s role as a major oil producer and as a key supplier of natural gas to Western Europe.
See: How a Russian invasion of Ukraine could trigger market shock waves
Also read: Tensions between Russia and Ukraine aren’t fully priced into commodities
Also, the United Arab Emirates on Monday said it intercepted two ballistic missiles targeting its capital, Abu Dhabi, with Houthi rebels blamed for brewing conflict in the region. Oil prices were lifted last week after the Iran-aligned Houthis claimed responsibility for an attack that targeted a key oil facility in Abu Dhabi, killing three people.
