Summary:
Asian oil prices dropped after a 2% gain, with major shipping firms like Maersk and CMA CGM resuming operations in the Red Sea.
Oil prices fell in early Asian trade on Wednesday following a gain of more than 2% as major shipping firms began returning to the Red Sea including Maersk and CMA CGM.
Houthi rebels have announced their intention to join the ongoing war between Israel and Hamas, and have attacked more than 15 vessels from Yemen in the Red Sea in recent weeks.
In most cases, the diversion from Red Sea and the adjacent Suez Canal would mean ships need to take the longer Cape of Good Hope route, adding two to four weeks to voyage time and raising logistic costs.
The US vowed to protect the key water way earlier this month. Tehran rejected the accusation of providing drones and missiles to Houthi rebels, according to media report.
Oil also found support from expectations central bank will cut interest rates next year. Lower interest rates cut borrowing costs, which can boost economic growth and energy demand.
Angola, Africa's second biggest oil producer, has lately decided to quit OPEC after disagreements over its production targets, which casts a pall on the organisation sparing no effort to prop up oil prices.
Brent crude is still within an ascending trend channel but it is on the verge of a dead cross - the 50 SMA crosses below the 200 SMA. As such any rally above $80 could still lure sellers back in.
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