(Reuters) – Oil steadied on Tuesday after sliding more than $1 the day before ahead of a trip by U.S. President Joe Biden to the Middle East that is likely to involve balancing support for Israel with containing a regional escalation of its war with Hamas.
Brent crude futures were up 28 cents at $89.93 a barrel, while U.S. West Texas Intermediate crude (WTI) was up 12 cents at $86.78 a barrel as of 1048 GMT.
Both oil benchmarks surged last week on fears the conflict in the Middle East could widen, with global benchmark Brent gaining 7.5% in its largest weekly gain since February. However, they slipped back on Monday.
U.S. President Joe Biden will make a high-stakes visit to Israel on Wednesday as the country prepares to escalate an offensive against Hamas militants that has set off a humanitarian crisis in Gaza and raised fears of a broader conflict with Iran.
Biden’s trip, however, is a balancing act between showing support for Israel’s war on Hamas and trying to rally Arab states to help head off a wider regional war, after Iran pledged “preemptive action” from the “resistance front” of its allies which include the Hezbollah movement in Lebanon.
“The risks remain, with Iran’s foreign minister warning the possible expansion of the war on other fronts is approaching the inevitable stage,” ANZ Research said in a note on Tuesday.
Elsewhere, Venezuela’s government and opposition are set to resume long-suspended talks on Tuesday which President Nicolas Maduro said would benefit the 2024 election, a move that could lead to Washington easing sanctions, multiple sources said.
Since 2019, the U.S. has sanctioned oil exports from Venezuela, a member of the Organization of Petroleum Exporting Countries (OPEC), to punish Maduro’s government following elections in 2018 that Washington considered a sham.
The U.S. government has been seeking ways to increase the flow of oil to world markets to alleviate high prices. But any real oil output increase by Venezuela will take time due to lack of recent investments.
Meanwhile, the CEO of Saudi Arabia’s Saudi Aramco said on Tuesday the company is able to ramp up oil production within weeks if needed, as global consumption is set to rise to a fresh record by year-end.
OPEC+, which comprises OPEC countries and leading allies including Russia, has been cutting output since last year in what it says is preemptive action to maintain market stability.
Reporting by Paul Carsten in London and Sudarshan Varadhan in Singapore; Editing by Kim Coghill, Ed Osmond and Jan Harvey
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