LONDON, Dec 27 (Reuters): Oil prices fell slightly on Wednesday, eating into the previous day's gains as investors monitored developments in the Red Sea.
Brent crude futures were down 53 cents, or 0.65 per cent, at $80.54 a barrel by 1141 GMT. US West Texas Intermediate crude lost 62 cents, or 0.82 per cent, to $74.95. Prices could be down on the day on Wednesday because of investor profit-taking after a strong rally on Tuesday, said UBS analyst Giovanni Staunovo.
Both benchmarks settled more than 2 per cent higher in the previous session as fresh attacks on ships in the Red Sea prompted fears of shipping disruption, with further price support from hopes of US interest rate cuts that could boost economic growth and fuel demand.
Despite the attacks by Yemen's Iran-backed Houthi militia, large shipping companies such as Maersk and France's CMA CGM were resuming passage through the Red Sea after the deployment of a multinational task force to the region.
The prospect of a prolonged Israeli military campaign in Gaza also remains a major driver of market sentiment. Israeli forces pummelled central Gaza by land, sea and air on Wednesday after Israel's Chief of Staff Herzi Halevi told reporters on Tuesday that the Gaza war would go on "for many months".
Elsewhere, oil loadings at the Russian Black Sea port of Novorossiisk were suspended because of a storm on Wednesday, sources told Reuters. But crude exports from the Caspian Pipeline Consortium (CPC) terminal near the port have already resumed, Kazakhstan's energy ministry said.
Meanwhile, the United States has finalized contracts to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve (SPR) after the largest sale in history last year, the US Department of Energy said on Tuesday.
The department said it bought the oil, for delivery to a site in Big Spring, Texas, for an average of $77.31 a barrel, below the average of $95 a barrel that oil sold for in 2022.
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