Oil prices dipped slightly on Tuesday after the recent rally as the market assessed the impact of geopolitical tensions and uncertainties surrounding Libyan oil production.
The recent surge was also driven by concerns over an escalation of the conflict in the Middle East following military clashes between Israel and Hezbollah in Lebanon.
Political disputes in Libya could continue to threaten oil production. As one of Africa’s largest oil producers, any prolonged disruption in Libya could push oil prices upward.
Meanwhile, geopolitical tensions in Eastern Europe could also contribute to higher crude prices. Attacks on the region’s energy infrastructure and concerns over regional stability could leave traders more cautious.
Despite concerns about demand, particularly from China, the risk of supply constraints from these regions may keep prices elevated in the near term.
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