carEconomicalEconomicalcar

Oil prices fall as Red Sea shipping disruptions ease / Higher prices forecast for 2024



Oil prices fell 3 percent on Thursday as shipping companies said they were ready to transit the Red Sea route, easing concerns about supply disruptions as tensions rise in the Middle East.

More active Brent crude futures for March delivery were down $2.39, or 3 percent, at $77.15. Brent futures for February delivery fell 1.3% to $78.39 per barrel.

The price of US West Texas Intermediate crude oil decreased by $2.34 or 3.2% to $71.77 per barrel. On Wednesday, oil prices fell nearly 2 percent as major shipping companies began to return to the Red Sea. On Friday, oil prices stabilized after a 3 percent drop the previous day as more shipping companies prepared to sail through the Red Sea. After Yemen’s Houthi militia began targeting ships, major companies stopped using Red Sea routes.

Brent crude futures were up 48 cents, or 0.6 percent, at $77.63 a barrel on Friday, the last trading day of 2023, while U.S. West Texas Intermediate (WTI) crude was up 37 cents, or 0.6 percent. It traded up 0.5% to $72.14.

Denmark’s Maersk ( MAERSKb.CO ) will now pass through the Suez Canal for almost all container ships sailing between Asia and Europe, diverting only a handful to Africa, according to a Reuters report of the group’s schedule on Thursday. he does.

It was announced earlier in the week that France’s CMA CGM will also increase the number of ships passing through the Suez Canal.

Phil Flynn, an analyst at Price Futures Group, said: “The perception is that the Red Sea route is opening up, speeding up supply to the market.”

The U.S. Energy Information Administration reported that U.S. crude oil inventories fell more than expected last week, capping price declines for a while.

Later, UBS analyst Giovanni Stanovo said prices fell further, likely as traders focused on much of the harvest from the U.S. Gulf Coast region, where refiners are trying to clear inventories to avoid taxes. Avoid over stocking at the end of the year.

EIA data showed U.S. crude inventories fell by 7.1 million barrels in the week ended Dec. 22, while analysts polled by Reuters had expected a decline of 2.7 million barrels. U.S. Gulf Coast crude inventories fell by 11.03 million barrels, the biggest drop since August, the data showed.

Investors also expect interest rate cuts in Europe and the United States in 2024, which could boost oil demand.

10% decrease in the annual price of oil

Oil prices are set to fall by around 10% in 2023, the first annual decline in two years, after geopolitical concerns, production cuts and global measures to curb inflation caused sharp price volatility.

However, both benchmarks are on track to close at their lowest year-end levels since 2020, when the pandemic hit demand and depressed prices.

Production cuts by OPEC+ have not been enough to support prices, and benchmarks are down nearly 20 percent from their highs this year.

The weak performance of oil at the end of the year contrasts with global stocks, which are on an upward path towards the end of 2023.

MSCI’s ( MIWD0000000PUS ) stock index, which tracks stocks in 47 countries, has risen about 20 percent since the start of the year as investors bet on a quick interest rate cut by the U.S. Federal Reserve next year.

In the foreign exchange market, after two years of strong growth, the dollar went down by 2% this year.

Expected interest rate cuts, which could lower consumer borrowing costs in major consumer regions, and a weaker dollar, which makes oil cheaper for foreign buyers, could boost demand in 2024, officials said.

A Reuters poll of 30 economists and analysts forecasts that Brent will average $84.43 a barrel in 2024, while averaging around $80 a barrel this year and peaking in 2022. Since the Russian attack on Ukraine, it has reached more than 100 dollars.

Leave a Reply

Back to top button