Easing Of Red Sea Transport Disruptions Stabilize Oil Prices

On Thursday, oil prices started to stabilize after they saw a sharp fall in the previous session. There are concerns regarding the stability of oil prices due to various shipping disruptions along the Red Sea. The disruptions rose because of tensions in the Middle East.

According to Reuters, “Brent crude futures inched up 10 cents, or 0.1%, to $79.75 a barrel by 0424 GMT, while U.S. WTI crude futures were trading 5 cents lower at $74.06 a barrel. Prices dropped nearly 2% on Wednesday as major shipping firms began returning to the Red Sea.”

The president of NS Trading, Hiroyuki Kikukawa, stated that shipping concerns in the Red Sea are easing off. However, there are worries regarding the tensions in the Middle East. Also, concerns have risen due to the involvement of Iran in the region, leading to difficulty in sales. He also added that there is optimism regarding the market going upside in the new year.

As per reports, there are also higher expectations for the recovery of fuel demand. This has been possible due to the United States’ monetary easing. Furthermore, the higher demand for kerosene during winter in the northern hemisphere also adds to the recovery in fuel demand.

Maersk, a Danish company, reported a scheduled transport of multiple container vessels through the Suez Canal and the Red Sea in the coming weeks. A few weeks ago, the company called a temporary halt to those routes after attacks by the Houthi militia near Yemen.

However, the market sentiment still depends upon the prospect of the prolonged Israeli military campaign in Gaza. This conflict is leading to attacks on ships in the Red Sea, which is one of the major concerns in the oil market.

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