Oil prices drift up after US launches naval force to guard shipping
Houthis vow to defy US-led mission and to keep targeting Red Sea trade in support of Gaza
20 December 2023 - 07:25
by Florence Tan
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Singapore — Oil prices ticked higher on Wednesday after rising more than 1% in the previous session on jitters over global trade disruption and geopolitical tensions in the Middle East after Houthi attacks on ships in the Red Sea.
Brent crude futures edged up 6c, or 0.1%, to $79.29 a barrel by 1.37am GMT while US West Texas Intermediate (WTI) crude was at $74.11 a barrel, up 17c, or 0.2%.
Washington on Tuesday launched a task force to safeguard Red Sea commerce as attacks by Iranian-backed Yemeni militants forced major shipping companies to reroute, stoking fears of sustained disruptions to global trade.
The Houthis vowed to defy a US-led naval mission and to keep targeting Red Sea shipping in support of Palestinian enclave Gaza’s Hamas movement.
About 12% of world shipping traffic passes up the Red Sea and through the Suez Canal. However, the effect 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 US bought 2.1-million barrels of crude for delivery in February, its energy department said on Tuesday, bringing total purchases to about 11-million barrels as it continued to replenish the strategic petroleum reserve (SPR) after the largest sale in history in 2022.
US crude and fuel inventories also rose last week, sources said, citing data from the American Petroleum Institute, against analysts’ expectations of a decline in crude stocks in a Reuters poll.
The Energy Information Administration (EIA) will publish official US stocks data at 3.30pm GTM on Wednesday.
S&P Global Commodity Insights said that looking ahead, the US 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.
US total liquids production in the fourth quarter stands at 21.4-million barrels per day (bpd), of which 13.3-million bpd is crude and condensate, the firm added.
“Not only is the US 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.
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 prices drift up after US launches naval force to guard shipping
Houthis vow to defy US-led mission and to keep targeting Red Sea trade in support of Gaza
Singapore — Oil prices ticked higher on Wednesday after rising more than 1% in the previous session on jitters over global trade disruption and geopolitical tensions in the Middle East after Houthi attacks on ships in the Red Sea.
Brent crude futures edged up 6c, or 0.1%, to $79.29 a barrel by 1.37am GMT while US West Texas Intermediate (WTI) crude was at $74.11 a barrel, up 17c, or 0.2%.
Washington on Tuesday launched a task force to safeguard Red Sea commerce as attacks by Iranian-backed Yemeni militants forced major shipping companies to reroute, stoking fears of sustained disruptions to global trade.
The Houthis vowed to defy a US-led naval mission and to keep targeting Red Sea shipping in support of Palestinian enclave Gaza’s Hamas movement.
About 12% of world shipping traffic passes up the Red Sea and through the Suez Canal. However, the effect 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 US bought 2.1-million barrels of crude for delivery in February, its energy department said on Tuesday, bringing total purchases to about 11-million barrels as it continued to replenish the strategic petroleum reserve (SPR) after the largest sale in history in 2022.
EXPLAINER: The Yemen Houthis attacking Red Sea ships
US crude and fuel inventories also rose last week, sources said, citing data from the American Petroleum Institute, against analysts’ expectations of a decline in crude stocks in a Reuters poll.
The Energy Information Administration (EIA) will publish official US stocks data at 3.30pm GTM on Wednesday.
S&P Global Commodity Insights said that looking ahead, the US 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.
US total liquids production in the fourth quarter stands at 21.4-million barrels per day (bpd), of which 13.3-million bpd is crude and condensate, the firm added.
“Not only is the US 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.
Reuters
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