2024-01-02 22:15:37
International oil prices fell on Tuesday (2nd), closing lower on the first trading day of 2024, giving up the big gains in early trading due to the entry of Iranian warships into the Red Sea.
energy commodity prices
- West Texas Intermediate (WTI) crude oil futures for February delivery fell $1.27, or 1.8%, to settle at $70.38 a barrel, the lowest closing price since December 13 last year. The early trading high reached $73.64 a barrel.
- Delivered in MarchBrent crude oil (Brent) futures prices fell $1.15, or 1.5%, to $75.89 a barrel, also the lowest closing price since December 13 last year, with an early high of $79.06.
- Gasoline futures for February delivery fell 0.5% to settle at $2.0949 a gallon.
- Delivered in FebruaryThermal Fuel FuturesPrices fell 0.1% to settle at $2.5258 per gallon.
- Natural gas futures prices for February delivery rose 2.2% to settle at $2.5680 per million Btu.
market drivers
International oil prices rose more than 2% in early trading on Tuesday as tensions in the Red Sea escalated before finally closing lower.
On Monday, foreign news quoted Iran’s semi-official news agency “Tasnim” as reporting that an Iranian warship had entered the Red Sea, but the report did not provide details of the warship’s mission.
The U.S. military said on Sunday it opened fire on Houthi rebels following they attacked a cargo ship owned by Maersk Line in the Red Sea, killing several rebels and destroying three ships. This means that the maritime conflicts related to the Gaza War have escalated. Danish shipping giant Maersk said on Tuesday that it would suspend ship navigation in the Red Sea and the Gulf of Aden until further notice.
Oil prices rose following the war between Israel and Hamas broke out last October, but the war premium quickly dissipated.Crude oil prices, which had cyclically risen amid concerns that the situation might escalate, still fell sharply in the fourth quarter, leaving Brent and WTI crude oil The overall decline in 2023 was the first annual decline since 2020.
Craig Erlam, senior market analyst at OANDA, said the focus will now turn back to the demand side and whether the central bank can achieve a soft landing on its target while actively raising interest rates. “At the moment OPEC+ members appear to be struggling quite a bit to comply with production quotas, and any outperformance in the global economy at this time will ease the burden on OPEC+,” Erlam said on Tuesday.
However, uncertainty regarding the demand outlook, record U.S. daily production (over 13 million barrels per day), and market doubts regarding OPEC’s unity have weakened the original support.
XM senior investment analyst Charalampos Pissouros said that due to the global economic slowdown, demand will continue to be sluggish, and U.S. crude oil production has reached a record high, so the recovery of oil prices may be destined to be limited and short-lived.
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