Americas News
More Losses For Oil On Red Sea Worries Easing And U.S. Inventory Draw
Growing optimism that the Red Sea shipping attacks would be curtailed if not stopped outright caused another substantial drop in oil prices on Thursday, even though the efficacy of a U.S.-led military operation has not yet been tested in the region.
The losses were said to have been driven partly by Maersk’s shipping schedule, which showed that the shipping giant will route almost all container vessels between Europe and Asia through the Suez Canal.
Brent for March delivery settled down $2.39, or 3 percent, at $77.15 per barrel, while West Texas Intermediate settled down $2.34, or 3.2 percent, to $71.77 per barrel.
Phil Flynn, senior market analyst at Price Future Group Inc., said, "The perception is that the Red Sea route is reopening and will bring supply to market weeks faster."
Oil trading was also said to have been influenced by news from the Energy Information Administration that the U.S. experienced a much larger-than-expected inventory draw last week –the bulk of which came from the Gulf Coast region, where refiners were clearing inventories to avoid high storage taxes at year end.
Additionally, inventories at the storage hub of Cushing, Oklahoma held steady at the highest level since November, and this caused Dennis Kissler, senior vice president at BOK Financial, to remark that the situation at Cushing “along with a mild winter is keeping prices subdued,” but he added that technical selling as prices breach moving average indicators mainly characterized Thursday’s trading behaviour.
In other oil-related news on Thursday, the ADS Group reported that soaring demand for travel and supply chain delays caused a record-breaking backlog of airplanes on order in November: a 354 percent year-on-year increase, contributing to a full recovery in the aerospace industry expected around 2024-25.
Also on Thursday, GasBuddy calculated that U.S. motorists could spend $446.9 billion on gasoline next year, with average spending falling to $2,407: down 2 percent from 2023, and 12 percent from 2022.
Patrick De Haan, head of petroleum analysis at GasBuddy, said, “The global refining picture continues to improve, providing more capacity and peace of mind that record-setting prices will stay away from the pump in 2024.
“I anticipate that we’ll still have some volatility, unexpected outages and disruptions, and potentially weather-related issues, but I do not expect it to lead to record prices.”
