Oil price news: Oil pares gains as risk-off sentiment outweighs Red Sea fears

Oil pared gains as broad risk-off sentiment undercut concerns about escalating conflict in the Red Sea.

West Texas Intermediate edged lower to trade below US$71 a barrel, following a retreat in equity markets. Volumes have remained thin after the holiday season, leading to exacerbated price movements.

Crude rallied earlier after Iran deployed a warship to the Red Sea, the latest flashpoint in the Middle East conflict. Attacks on merchant shipping in the key transit corridor have led to the re-routing of everything from container ships to gas carriers.

“The move by Iran of moving the battleship into the Red Sea is more bark than bite, but it will keep crude in a nervous trade,” said Dennis Kissler, senior vice president at BOK Financial.