Oil prices dealt another blow heading into 2024
2023-12-29
Summary:
Oil prices rebounded after a 3% drop on Friday as more shipping firms prepared to resume Red Sea routes, alleviating supply concerns.
Oil prices pared some of its loss on Friday following a drop of 3% as more shipping companies said they were ready to transit the Red Sea route, easing concerns about supply disruptions.
Maersk will route almost all container vessels sailing between Asia and Europe through the Suez Canal from now, and MA CGM is also increasing the number of vessels travelling through the water way.
The EU has signalled its support of the US maritime task force with a joint statement condemning the Houthi attacks. Saudi Arabia and UAE earlier proclaimed no interest in the venture which is seen as supporting Israel.
The US is facing pressure from Iran's military proxies in Syria and Iraq. Also Britain, France, Germany and the US on Thursday condemned Iran accelerating its production of highly enriched uranium, complicating a return to nuclear deal.
Commercial crude-oil stocks excluding the SPR fell by 7.1 million barrels in the week ended 22 Dec, the EIA said. Analysts surveyed by The Wall Street Journal had predicted a decrease of 2.4 million barrels.
Oil output in Russia, the third largest producer in the world, is expected to be steady or even to increase next year as Moscow has largely overcome Western sanctions, analysts said. Almost all of its oil exports this year have been shipped to China and India.
Brent crude failed to take out the confluence of the descending channel and the 200 SMA. We could see a deeper pullback towards $73 if the $77.5 support area is not respected.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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