Markets assess Red Sea attacks and U.S. rate cuts as oil prices rise.

On Wednesday, oil prices partially recovered in early Asian trade, as investors evaluated competing factors such as output cuts by major producers and Red Sea attacks, alongside reduced U.S. rate cut expectations.

The price of Brent crude oil rose 12 cents, or 0.15%, to $82.46 a barrel, while WTI increased by 9 cents, or 0.12%, to $77.13.

On Tuesday, the Brent and WTI contracts experienced a decline of 1.5% and 1.4% respectively.

On Tuesday, Washington once again vetoed a draft United Nations Security Council resolution on the Israel-Hamas war, preventing a demand for an immediate humanitarian ceasefire. Instead, the U.S. is pushing for the Security Council to adopt a resolution linking a ceasefire to the release of Israeli hostages by Hamas.

Since Friday, at least four vessels have been hit by drone and missile strikes in the Red Sea and Bab al-Mandab strait, which are under the control of Yemen's Iran-aligned Houthis. These attacks have raised concerns about the security of freight flows through the critical waterway.

Despite a decline in oil refining, Russia intends to fulfill its OPEC+ quota in February.

Since the start of the year, the country's energy minister stated on Tuesday that refinery throughput in Russia has decreased by 7%, as a result of Ukrainian drone attacks damaging facilities.

The possibility of delayed rate cuts by the Federal Reserve has affected the outlook for oil demand, as U.S. inflation data last week pushed back expectations for an imminent start to the Fed's easing cycle, with economists polled by Reuters now forecasting a cut in June.

According to a preliminary Reuters poll, U.S. crude inventories rose last week, while distillates and gasoline stockpiles decreased, the poll showed on Tuesday.

On average, crude inventories increased by approximately 4.3 million barrels during the week ending February 16, according to a poll of analysts conducted by Reuters.