2023-12-15 22:20:59
International oil prices fell on Friday (15th), but closed off the intraday low and still rose this week. The U.S. benchmark WTI crude oiland global benchmarks Brent crude oil It was the first weekly gain in eight weeks.
Oil prices fell sharply in early trading as the dollar gained following Federal Reserve officials attempted to walk back dovish comments from Fed Chairman Jerome Powell earlier this week. But attacks by Yemen’s Houthi rebels on ships crossing the Red Sea have raised the possibility of disruptions to shipments of oil and other goods, providing some support for oil prices.
energy commodity prices
- West Texas Intermediate (WTI) crude futures for January delivery fell 15 cents, or 0.2%, to settle at $71.43 a barrel. WTI oil prices rose 0.3% this week.
- Delivered in FebruaryBrent crude oil (Brent) futures fell 6 cents, or nearly 0.1%, to $76.55 a barrel. Brent oil prices rose 0.9% this week.
- Gasoline futures for January delivery rose 0.9% to close at $2.14 a gallon, up nearly 4.3% this week.
- Delivered in JanuaryThermal Fuel FuturesPrices rose 1.1% to close at $2.62 per gallon, up 1.5% for the week.
- Natural gas futures for January delivery rose 4.1% to settle at $2.49 per million Btu, but fell 3.5% this week.
market drivers
According to Archyde.com and Bloomberg reports on Friday, Danish shipping company AP Moeller-Maersk said it will suspend all container transportation through the Red Sea until a resumption date is notified, and the transportation route will be detoured through Africa due to threats from Houthi rebels. Risks to its fleet continue to rise.
Manish Raj, managing director of Velandera Energy Partners, said the Red Sea is one of the hotspots for offshore crude oil flows, accounting for regarding 10% of the global total. However, while a blockade of the Red Sea route would indeed cause chaos, it would not be as harmful as a blockade of the Strait of Hormuz near Iran, which would leave no viable alternative.
Phil Flynn, senior market analyst at Price Futures Group, said the current market concern is the rising cost of insurance for these ships. “Obviously, the risk to oil supplies is significant, although most attacks so far have been once morest cargo ships rather than oil-related vessels. But with the continued high risk to vessels in the Red Sea, if an oil tanker is attacked, without saying much, the market You’ll see oil prices skyrocket.”
this week WTI crude oiland Brent crude oilFutures prices were both higher.
Peter McNally, global head of industry analysts at Third Bridge, said the combination of falling U.S. inventories, stronger economic data and increased compliance with OPEC’s production cuts in November were the highlights of this week’s push for oil prices. “However, ongoing seasonal challenges have forced OPEC to continue cutting production until the end of the first quarter of 2024, so it remains to be seen whether OPEC’s actions will be enough to stem the trend of rising inventories.”
Oil price pressure
New York Fed Chairman John Williams said it was too early to discuss whether to cut interest rates. “We are not really talking regarding a rate cut right now.” This comment sent oil prices lower in early trading on Friday because it was consistent with Powell’s statement on Wednesday that “Fed officials “Start discussing when to cut interest rates.”
Michael Hewson, chief market analyst at CMC, said that U.S. stocks were excited regarding Powell’s change of stance on Wednesday, but Williams poured cold water on market expectations for an interest rate cut in March next year and sounded an “alarm bell.”
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