The Lower Eastern Times Opening The Third Eye
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Oil prices stabilized on Thursday following a notable decline in the preceding session, as concerns about disruptions in Red Sea transport routes eased despite escalating tensions in the Middle East. Brent crude futures saw a marginal increase of 10 cents, reaching $79.75 per barrel by 0424 GMT, while U.S. WTI crude futures experienced a slight decrease of 5 cents, settling at $74.06 per barrel. Prices had witnessed a nearly 2% drop on Wednesday, coinciding with the return of major shipping firms to the Red Sea.
Hiroyuki Kikukawa, President of NS Trading, a unit of Nissan Securities, noted that worries regarding shipping in the Red Sea had subsided. However, ongoing concerns about Middle East tensions, particularly Iran’s involvement in the region, posed challenges for further selling. Kikukawa suggested that the market might attempt an upward movement, possibly in the early new year. He also cited expectations of a demand recovery due to monetary easing in the United States and increased kerosene demand during the winter in the northern hemisphere.
Danish shipping company Maersk announced plans to resume several dozen container vessels’ travel via the Suez Canal and Red Sea in the coming weeks, after temporarily suspending these routes earlier in the month following attacks by Yemen’s Iran-backed Houthi militia. Despite these positive developments, the market remained sensitive to the possibility of an extended Israeli military campaign in Gaza and the potential spillover of the conflict to attacks on ships in the Red Sea.
Market sentiment was also influenced by Israeli forces intensifying actions in central Gaza on Wednesday, with indications from Israel’s chief of staff, Herzi Halevi, that the war could persist “for many months.” Additionally, the delayed U.S. government data on fuel stockpiles, scheduled for release on Thursday due to the Christmas holiday, was anticipated to impact market dynamics.
Data from the American Petroleum Institute revealed on Wednesday that crude stocks had increased by 1.84 million barrels in the week ending Dec. 22, contrary to analysts’ expectations for a 2.7 million-barrel decrease, as polled by Reuters.
