December 20, 2023 (MLN): Global oil prices experienced a slight decline on Wednesday as investors remained cautious and kept a close watch on attacks by the Houthis on ships in the Red Sea.
Brent crude is currently trading at $79.25 per barrel, down by 0.13% on the day.
While West Texas Intermediate crude is trading at $74 per barrel, down by 0.17% on the day.
Oil prices have been on an upward trajectory since experiencing a significant decline of over 3.5% on December 12 due to demand headwinds and excess supply in the market.
Yesterday’s session marked the fifth straight gain for the commodity as the market weighed on supply disruptions.
Washington on Tuesday launched a task force to safeguard Red Sea commerce as attacks by the Yemeni militants forced major shipping companies to reroute, stoking fears of sustained disruptions to global trade, as Reuters reported.
"Thus far, the U.S.-led naval mission to mitigate Houthi attacks has failed to ease broad concerns of safe passage through the Red Sea, with major maritime carriers still choosing to steer clear amid the tensions," said Yeap Jun Rong, market strategist at IG.
The Houthis vowed to defy the U.S.-led naval mission and to keep targeting Red Sea shipping in support of Palestinian enclave Gaza's ruling Hamas movement.
About 12% of world shipping traffic passes up the Red Sea and through the Suez Canal. However, the impact on oil supply has been limited so far, analysts said, as the bulk of Middle East crude is exported via the Strait of Hormuz.
The U.S. bought 2.1 million barrels of crude for delivery in February, its Energy Department said on Tuesday, bringing total purchases to about 11m barrels as it continued to replenish the Strategic Petroleum Reserve (SPR) after the largest sale in history last year.
S&P Global Commodity Insights said looking ahead, the U.S. is producing more oil than any country in history, leading strong non-OPEC+ supply growth that will more than meet growing global demand in 2024.
U.S. total liquids production in the fourth quarter stands at 21.4m barrels per day (bpd), of which 13.3m bpd is crude and condensate, the firm added.
"Not only is the United States producing more oil than any country in history, but the amount of oil (crude oil, refined products and natural gas liquids) that it is exporting is near the total production of Saudi Arabia or Russia," Jim Burkhard, a vice president at S&P Global said in a note.
Copyright Mettis Link News
Posted on: 2023-12-20T11:02:38+05:00
