2023-12-22 07:45:37
Oil prices rose during today’s trading, Friday, December 22 (2023), amid continuing fears of disruption to global supplies once morest the backdrop of political tensions.
This comes in the wake of Houthi attacks on ships in the Red Sea. This prompted many shipping companies to change course, although Angola’s decision to leave OPEC raised questions regarding the organization’s efforts to support prices.
Oil prices ended trading yesterday, Thursday, December 21, with a decline, breaking a series of gains that lasted 4 sessions, following Angola announced its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC).
Oil prices today
By 07:24 AM GMT (10:24 AM Mecca time), benchmark Brent crude futures, for February 2024 delivery, rose 0.69%, reaching $79.94 per barrel.
At the same time, US West Texas Intermediate crude futures, for delivery in February 2024, increased by 0.76%, reaching $74.45 per barrel, according to figures monitored by the specialized energy platform.
Crude oil prices are heading to achieve weekly gains of regarding 4% for the second time in a row, supported by fears of supply disruption, amid geopolitical tensions that have caused disruption in global trade, in the wake of Houthi attacks on ships in the Red Sea.
An oil storage site in Japan – Photo from Archyde.com
Oil price analysis
Oanda’s chief market analyst, Kelvin Wong, said that rising geopolitical risks due to the disruption of shipping traffic in the Red Sea support the current bullish tone in crude oil prices.
More shipping companies are avoiding the Red Sea due to ship attacks carried out by the Houthi group in Yemen, in response to Israel’s continued targeting of civilians in Gaza, which has caused disruptions to global trade through the Suez Canal, through which regarding 12% of global trade passes.
Germany’s Hapag-Lloyd and Hong Kong’s OOCL were the latest companies to announce they would avoid the Red Sea by rerouting ships or suspending sailings.
On Tuesday, the United States launched a multinational operation to protect trade in the Red Sea, but the Houthis said they would continue to launch attacks.
Oil price forecasts
Analysts say the impact on oil supplies so far has been limited, as the bulk of Middle East crude is exported through the Strait of Hormuz.
However, CMC Markets analyst Leon Lee said oil prices may see a rebound “due to geopolitical conflicts and the imminent implementation of OPEC+ production cuts.”
He added: “Therefore, a small supply gap is likely to occur in January next year, and the price of WTI may rise to $75 to $80 per barrel,” it said. Archyde.com.
Saudi Arabia, Russia and other members of OPEC+, which pump more than 40% of the world’s oil, agreed to voluntary production cuts totaling regarding 2.2 million barrels per day in the first quarter of 2024.
The Saudi-led coalition has in recent months mobilized support to deepen production cuts and boost oil prices, but Angola said on Thursday that it would withdraw from OPEC; Because its membership does not serve its interests.
Angola had previously protested the decision of the broader OPEC+ group to reduce the country’s oil production quota for 2024.
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