Crude recovers slightly after last week's losses

New Delhi [India], February 5 : In a volatile mid-morning trade on February 5, crude oil futures showed signs of recovery after experiencing a weekly loss of almost 7 per cent.
According to S&P Global Commodity Insights, the Intercontinental Exchange (ICE) April Brent futures contract rose by 21 cents/b (0.27 per cent) to USD 77.54/b, while the New York Mercantile Exchange (NYMEX) March light sweet crude contract increased by 11 cents/b (0.15 per cent) to USD 72.39/b.
The international crude oil benchmarks faced downward pressure in the week leading to February 2. The front-month ICE contract saw a significant drop of 7.44 per cent to settle at USD 77.33/b, marking the lowest point since January 10 at USD 76.80/b.
The front-month NYMEX light sweet crude contract followed suit, declining by 7.35 per cent to USD 72.28/b, reaching the lowest level since January 11 at USD 72.02/b.
Geopolitical tensions took centre stage as US forces carried out multiple strikes over the weekend, escalating concerns in the Middle East.
The destruction of seven anti-ship cruise missiles in Houthi-controlled areas of Yemen on February 3 and 4 fuelled uncertainty in the market.
These strikes followed coordinated hits against 36 Houthi targets by forces from the US, UK, Australia, Bahrain, Canada, Denmark, the Netherlands, and New Zealand. The targeted areas, allegedly used for striking ships in the region, raised geopolitical concerns.
SAXO's APAC strategy team noted that oil prices were firmer in early Asia, attributing the rise to US attacks against the Houthis and the latter's vow to respond.
Meanwhile, reports of constructive ceasefire talks between Israel and Hamas added a layer of complexity to the market sentiment, although analysts remained sceptical about an imminent resolution.
In economic news, Japan's services PMI displayed continued growth, reaching 53.1 in January, up from 51.5 the previous month.
This marked the 17th consecutive month of growth, with both business activity and new orders rising at accelerated rates. Additionally, exports increased for the first time in five months, according to S&P Global Market Intelligence.
On the commodities front, Dubai crude swaps and inter-month spreads experienced declines in midmorning trade on February 5.
The April Dubai swap dropped to USD 76.67/b, down USD 1.39/b (1.78 per cent) from the previous close.
Intermonth spreads for March/April and April/May also decreased, indicating a shift in market dynamics.
The April Brent/Dubai Exchange of Futures for Swaps (EFS) was pegged at 85 cents/b, down 20 cents/b.