2023-12-26 07:30:07
Oil stability amid markets’ focus on the Middle East and interest rate cuts
Oil prices witnessed little change on Tuesday, with investors focusing on geopolitical tensions in the Middle East and optimism that the Federal Reserve (the US central bank) will soon begin lowering interest rates, which will contribute to higher global economic growth and boost demand.
Brent crude futures fell 26 cents, or 0.3%, to $79.13 per barrel by 01.15 GMT, while the price of US West Texas Intermediate crude reached $73.59 per barrel, up by three cents.
The volume of transactions is weak, given that some markets are still closed for the Christmas holiday.
Both crudes achieved gains of regarding 3% over the past week following Houthi attacks in Yemen on ships disrupted global shipping and trade, which increased tensions in the Middle East as the Israeli war on the Gaza Strip continued.
The Danish company Maersk said on Sunday that it is preparing to resume shipping operations through the Red Sea and the Gulf of Aden, indicating the start of a US-led military operation aimed at ensuring the safety of trade in the region.
Shipping companies had stopped the passage of ships through the Red Sea leading to the Suez Canal, through which regarding 12% of global trade passes, and imposed additional fees for changing the course of ships.
Separately, on Monday, Iran denied an American claim that a drone launched from its territory had struck a chemical tanker in the Indian Ocean.
The Pentagon said over the weekend that the Liberian-flagged ship “Kim Pluto,” owned by Japan and operated by the Netherlands, was bombed 200 nautical miles (370 kilometers) off the coast of India.
Oil prices also received support from expectations that the US Federal Reserve will cut interest rates next year, following data released on Friday showed, by some key measures, that inflation is now at or below the central bank’s target of 2%.
Lower interest rates reduce consumer borrowing costs, which can boost economic growth and demand for oil.
(Archyde.com)
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