Oil stabilises as major shippers eye a Red Sea return
Oil prices were stable on Wednesday after Tuesday’s trading saw strong gains as various major shippers restarted Red Sea passages.
Brent crude futures rose 15 cents, or 0.2 per cent, to $81.22 a barrel by 0730 GMT, while U.S. West Texas Intermediate crude eased 8 cents, or 0.1 per cent, to $75.49 a barrel.
The benchmarks settled more than 2 per cent higher in the previous session as fresh attacks on ships in the Red Sea prompted fears of shipping disruptions, on top of hopes of U.S. interest rate cuts that could boost economic growth and fuel demand.
Denmark’s Maersk said on Sunday it would begin to use the Red Sea and Gulf of Aden route again after multi-national naval support task force Operation Prosperity Guardian was launched on 18th December.
Following the attacks from Houthi militia earlier tin the month, firms had been using a longer alternative route around the southern tip of Africa.
German firm Hapag-Lloyd said it will take a decision on the route today.
Oil also remained supported by speculation that the U.S. Federal Reserve will begin to lower interest rates in 2024. Lower interest rates reduce borrowing costs, which can stimulate economic growth and fuel demand.
U.S. crude stocks were expected to have fallen by 2.6m barrels last week, while distillate and gasoline inventories likely rose, a preliminary Reuters poll showed on Tuesday.
Inventory reports from the American Petroleum Institute industry group and the Energy Information Administration, the statistical arm of the U.S. Department of Energy, are expected today and Thursday, respectively, a day later than normal for both reports due to the Christmas holiday.
The market continues to wait for developments in the OPEC+ cutting plan, expected to last into Q1 of next year, alongside monthly updates on U.S. inventories.
Reuters