During today’s trade, Thursday, December 21 (2023), oil prices edged higher, reaping gains for the fourth consecutive session after starting its trade on a bearish note.
Despite worries about global trade disruptions due to tensions in the Middle East, oil markets faced upside from lower demand following a surprise increase in US crude inventories.
Yesterday, Wednesday, December 20, oil prices ended their trade higher, reaping a third consecutive day of gains, amid fears of disruption to global supplies.
Oil price today
By 07:15 AM GMT (10:15 AM Mecca time), benchmark Brent crude futures for February 2024 delivery were up 0.05% at $79.74 a barrel.
At the same time, US West Texas Intermediate crude futures for delivery in February 2024 rose 0.03% to $74.24 a barrel, according to figures tracked by the Specialized Energy Platform.
Crude oil prices have risen in recent days amid fears of supply disruptions amid geopolitical tensions that have disrupted global trade following Houthi attacks on ships in the Red Sea.
Oil price analysis
Investors worry about trade disruptions as major shipping companies choose to move away from the Red Sea route; Long journeys can lead to increased transport and insurance costs.
“Market attention has turned to the slowdown in global demand, which is seen as limited to oil unless the impact on the Red Sea extends to the Strait of Hormuz,” said Tsuyoshi Ueno, chief economist at NLI Research Institute.
He added: “Increasing US crude oil inventories and record domestic oil production are adding to the pressure,” the company said. Reuters.
U.S. crude inventories rose 2.9 million barrels to 443.7 million barrels in the week ended Dec. 15, the U.S. Energy Information Administration said on Wednesday, compared with analysts’ expectations for a decline of about 2.3 million barrels in a Reuters poll.
U.S. crude oil production rose to 13.3 million barrels a day last week, up from an all-time high of 13.2 million barrels, the EIA said.
Oil supply
As for shipping, about 12% of world traffic passes through the Red Sea and Suez Canal, however, so far the impact on oil supplies has been limited, analysts say; Because Middle Eastern crude oil is exported through the Strait of Hormuz.
Experts believe the absence of additional production cuts by OPEC+ this year; Oil prices remain within their range until the end of the year, with focus on key economic figures and the reaction to the US dollar.
The U.S.-led coalition that imposes price caps on seaborne Russian oil announced changes to its compliance system on Wednesday that the Treasury Department said would make it harder for Russian exporters to breach the cap.
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