Attacks by the Houthis on ships in the Red Sea have raised concerns of oil supply disruptions
18 December 2023 - 14:36
byAlex Lawler
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil posted gains last week, after seven weeks of decline. Picture: 123RF
London — Oil rose on Monday as attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruptions, though scepticism about Russia’s plan to cut exports in December limited gains.
BP has temporarily paused all transits through the Red Sea, it said on Monday, after attacks over the weekend by Houthi forces which control most of Yemen. Other shipping firms said over the weekend that they would avoid the Suez Canal.
Brent crude futures were up 62c, or 0.8%, to $77.17 a barrel by 1150 GMT, while US West Texas Intermediate crude rose 47c, or 0.7%, to $71.90.
Both crude benchmarks posted small gains last week, after seven weeks of decline, after a US Federal Reserve meeting last week raised hopes that interest rate hikes are over and cuts are on their way.
“The rise in geopolitical risk premium, which has come in the form of regular hostilities towards commercial vessels in the Red Sea by Iran-backed Houthi rebels plays its indisputable part in oil’s resurrection,” said Tamas Varga of oil broker PVM. said Tamas Varga of oil broker PVM.
Also adding support, Russia said on Sunday it would deepen oil export cuts in December by potentially 50,000 barrels per day or more, earlier than promised, as the world's biggest exporters try to support global oil prices.
This comes after Moscow suspended about two-thirds of loadings of its main export grade Urals crude from ports due to a storm and scheduled maintenance on Friday.
Still, PVM’s Varga was sceptical of the extent to which Russia will make voluntary output cuts.
“In reality it is just repackaging weather-related halts in exports,” he said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil rises on Red Sea jitters
Attacks by the Houthis on ships in the Red Sea have raised concerns of oil supply disruptions
London — Oil rose on Monday as attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruptions, though scepticism about Russia’s plan to cut exports in December limited gains.
BP has temporarily paused all transits through the Red Sea, it said on Monday, after attacks over the weekend by Houthi forces which control most of Yemen. Other shipping firms said over the weekend that they would avoid the Suez Canal.
Brent crude futures were up 62c, or 0.8%, to $77.17 a barrel by 1150 GMT, while US West Texas Intermediate crude rose 47c, or 0.7%, to $71.90.
Both crude benchmarks posted small gains last week, after seven weeks of decline, after a US Federal Reserve meeting last week raised hopes that interest rate hikes are over and cuts are on their way.
“The rise in geopolitical risk premium, which has come in the form of regular hostilities towards commercial vessels in the Red Sea by Iran-backed Houthi rebels plays its indisputable part in oil’s resurrection,” said Tamas Varga of oil broker PVM. said Tamas Varga of oil broker PVM.
Also adding support, Russia said on Sunday it would deepen oil export cuts in December by potentially 50,000 barrels per day or more, earlier than promised, as the world's biggest exporters try to support global oil prices.
This comes after Moscow suspended about two-thirds of loadings of its main export grade Urals crude from ports due to a storm and scheduled maintenance on Friday.
Still, PVM’s Varga was sceptical of the extent to which Russia will make voluntary output cuts.
“In reality it is just repackaging weather-related halts in exports,” he said.
Reuters
Goldman expects US production to push oil price as low as $70
At least eight killed, 84 injured in Guinea oil terminal blast
Reduced oil flows from Russia heat up oil prices
Oil lifts for second day due in part to weaker dollar
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.