Oil nudges up as investors eye Mideast conflict

Oil prices edged up on Monday as traders watched for supply disruption risks in the Middle East following strikes by U.S. and British forces to stop Houthi militia in Yemen from attacking ships in the Red Sea, Reuters reported.

Brent crude futures were up 24 cents, or 0.3%, to $78.53 a barrel by 0737 GMT after settling 1.1% higher on Friday. U.S. West Texas Intermediate crude was at $72.85 a barrel, up 17 cents, or 0.2%, following a near 1% gain in the previous session.

The benchmarks jumped more than 2% last week to touch their highest intraday levels this year after U.S. and British forces launched dozens of air strikes against Houthi forces in retaliation for months of attacks on Red Sea shipping that the Iran-backed fighters cast as a response to the war in Gaza.

“There are supply risks for the market given the escalation in (the) Red Sea,” said Warren Patterson, head of commodities research at ING. “However, for now, we are not seeing any impact on oil supply. And I guess we would need to see significant escalation before that happens.”

In Libya, people protesting against perceived corruption threatened to shut down two more oil and gas facilities after shutting the 300,000 barrel-per-day Sharara field on Jan. 7.

In the U.S., power and natural gas companies were preparing for extreme cold over the Martin Luther King Day holiday weekend that was expected to cause record gas demand while also cutting supplies by freezing wells.

The Texas power grid operator on Sunday issued an appeal to the public calling for energy conservation.