April 24 (UPI) -- Crude oil prices were searching for direction in early Tuesday trading as geopolitical risk tugged against potential risks on the demand side.
The price of oil swung between a loss of more than 1 percent to a gain of more than 1 percent in trading Monday after the U.S. government eased sanctions on a Russian aluminum producer. Attention shifted to geopolitical issues by late in the day, including the conflict in Yemen and concerns about the fate of the Iranian nuclear deal.
With a track record of opposition to Tehran, CIA Director Mike Pompeo got last-minute support to become the next U.S. secretary of state late Monday afternoon. In a research note, advisors at French financial services company Société Générale said geopolitical issues like Iran put the sentiment for crude oil clearly in bullish territory.
"While oil reacts to geopolitical headlines with more vim and vigor the real reason that this market is more sensitive to these headlines is because global oil supply is tightening," Phil Flynn, the senior market analyst for the PRICE Futures Group in Chicago, said in market commentary emailed to UPI.
A survey of analysts from commodity pricing group S&P Global Platts revealed expectations of a drain on U.S. crude oil stocks of 1.1 million barrels. Gasoline inventories are expected to decline by 500,000 barrels. Federal data are published Wednesday.
Crude oil prices were more or less flat ahead of the opening bell in New York. The price for Brent crude oil was up 0.08 percent as of 9:17 a.m. EDT to $74.77 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.04 percent to $68.67 per barrel.
Traders may be taking a wait-and-see approach as French President Emmanuel Macron is expected to try to convince U.S. President Donald to stay in the Iranian nuclear deal during talks Tuesday in Washington.
Elsewhere, trade tensions are still on the radar between the United States and China, tensions the International Monetary Fund said could stifle growth. On Tuesday, China published an assessment of the human rights record in the United States, finding "severe flaws in the American-style democracy."
Platts, meanwhile, found that by looking at the inventory levels alone, there was clear support for more gains in the price of oil. Most of the surplus by now has been wiped out, though those same bullish trends mean everyday consumers may be facing tough choices in response to higher gasoline prices.
"The bigger issue moving forward is what impact, if any, might the higher oil prices have on demand?" Oil Futures Editor Geoffrey Craig said in the emailed market report.