U.S. crude oil futures experienced a pullback on Tuesday after reaching a three-month high last week amidst ongoing conflict in the Middle East. The West Texas Intermediate contract for March declined by $1.01 to settle at $78.18 a barrel, while the Brent contract for April dropped $1.16 to $82.40 a barrel. Last week, U.S. crude saw a 3% increase, settling at $79.19 a barrel on Friday, its highest price since November 6, while the global benchmark rose 1.5% to reach its highest price since January 26.

The pullback in oil prices on Tuesday was attributed to traders taking profits after WTI's strong performance this month, according to Robert Thummel, a senior portfolio manager with Tortoise Capital. Additionally, Tamas Varga, an analyst with oil broker PVM, noted that crude prices were also influenced by the decline in heating oil and gasoil contracts as natural gas prices plummeted.

The conflict in the Middle East, particularly Israel's strikes in Lebanon and Gaza, contributed to the rise in crude futures last week. The market seemed unaffected by inflation concerns in the U.S. and a bearish demand forecast from the International Energy Agency. The attack by Houthi militants on a cargo ship in the Bab el-Mandeb strait highlighted the threats to commercial vessels in the Red Sea, prompting shipping companies like Maersk to reroute cargo around the Cape of Good Hope in Africa.

Varga warned of escalating Houthi attacks on cargo ships in the region, emphasizing the ongoing risks in the Red Sea and Gulf of Aden. The fluctuation in oil prices reflects the volatility driven by geopolitical tensions and supply chain disruptions in key oil shipping routes.