Oil futures experienced a decline on Thursday as concerns regarding potential shipping disruptions in the Red Sea took a backseat for traders. The market eagerly awaited official data on U.S. crude inventories after an industry report revealed an unexpected increase in stocks.
Price Action
- West Texas Intermediate crude for February delivery fell 89 cents, or 1.2%, to $73.22 a barrel on the New York Mercantile Exchange.
- The global benchmark, February Brent crude, was down 93 cents or 1.2%, reaching $78.72 a barrel on ICE Futures Europe.
- In terms of Nymex, January gasoline dropped 1% to $2.134 per gallon, while January heating oil decreased by 0.6% to $2.609 per gallon.
- January natural gas remained unchanged at $2.619 per million British thermal units.
Market Drivers
Shipping company Maersk revealed on Wednesday its plans to move several dozen container ships through the Suez Canal and Red Sea in the upcoming days and weeks. These decisions were made following previous reroutes caused by drone and missile attacks conducted by Iranian-backed Houthi rebels in Yemen during the Israel-Hamas war.
Naval Alliance Formed to Counter Attacks in Middle East
The U.S. recently announced the establishment of a naval alliance aimed at thwarting attacks that have raised concerns about potential disruptions to oil shipments from the Middle East.
According to Stephen Innes, Managing Partner at SPI Asset Management, global shipping giants are preparing to resume navigation through the Red Sea despite ongoing missile attacks from Houthi rebels. The decision to resume operations reflects a calculated risk, as it relies on the success of a new multinational maritime task force named Prosperity Guardian, which has been commissioned to safeguard the region.
Inventory Report and Expectations
The American Petroleum Institute reported a 1.8 million barrel increase in U.S. crude inventories last week, according to a reliable source. The official data on U.S. crude inventories for that same week will be released by the Energy Information Administration on Thursday morning, a day later than usual due to the Christmas Day holiday.
Analysts surveyed by S&P Global Commodity Insight have predicted, on average, a 3.5 million barrel decrease in crude inventories for the week ending December 22nd. It is also expected that gasoline supplies will rise by 710,000 barrels, while distillates will see a decline of 50,000 barrels.
Related Articles
![Amazon's Latest Move Poses a Threat to Space Giant SpaceX](https://www.signalsforex.net/img/0888b08e-b978-43c0-bdb4-4db1785eb1d5/news-article-3.jpeg?fm=jpg&q=80&fit=max&crop=1440%2C1080%2C240%2C0)
Amazon's Latest Move Poses a Threat to Space Giant SpaceX
Amazon's founder, Jeff Bezos, has positioned the company to disrupt the space industry and compete with SpaceX through its close ties with Blue Origin and the l...
![Ford and GM Stocks Rise as Workers Strike](https://www.signalsforex.net/img/0888b08e-b978-43c0-bdb4-4db1785eb1d5/news-article-3.jpeg?fm=jpg&q=80&fit=max&crop=1440%2C1080%2C240%2C0)
Ford and GM Stocks Rise as Workers Strike
Ford and GM stocks rise as 13,000 U.S. auto workers go on strike. Ford's bonds experience more selling than GM's. Ford and GM brace for financial impact of stri...
![Qualcomm Surpasses Expectations with Strong Revenue Forecast](https://www.signalsforex.net/img/0888b08e-b978-43c0-bdb4-4db1785eb1d5/news-article-3.jpeg?fm=jpg&q=80&fit=max&crop=1440%2C1080%2C240%2C0)
Qualcomm Surpasses Expectations with Strong Revenue Forecast
Qualcomm exceeds Q3 earnings estimates and provides a strong revenue forecast for the December quarter, leading to a surge in stock. Market response is positive...