Oil Prices Rise As Tankers Avoid Red Sea

Question is, how high can it go? So this story is out of CNBC. Bam. Oil rises more than 2% on Red Sea tanker attack and reroutings. It says oil rose more than 2% on Monday as attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruptions. Although ample supply and skepticism around Russia’s plan to cut exports in December limited know it’s really interesting.

There was a story the other day about the sheer amount of oil that America was pumping is now eclipsing what’s going on with OpEC, meaning that as America starts to pump even more oil, OPEC’s effect on the market can diminish. Very interesting times right now, especially with our strategic oil reserves where they are currently. Now, it says here a norwegian owned vessel was attacked in the Red Sea on Monday and oil major BP said that it has temporarily paused all transits through the Red Sea.

Other shipping firms said over the weekend that they would avoid the route. The West Texas Intermediate, or WTI, contract for January gained a dollar 90, or 2. 66%, to trade at 73 33, while Brent contract for February rose over $2, or 2. 69%, to 78 61 a barrel. Both crude benchmarks posted small gains last week following seven weeks of decline after the US Federal Reserve meeting last week raised hopes that the interest rate hikes are over and that cuts are on the way.

You know what? Let’s just go ahead and say this video is sponsored and it’s sponsored by the how to prayer. Prayer the real estate crash course. I’ve thrown some 80% off links down below and we’re calling it the I’m stuck in an airport discount. Check this out. It says the rise in geopolitical risk premium. Come on, how smooth is that? Which has come in the form of regular hostilities towards commercial vessels in the Red Sea by Iran backed Houthi rebels, plays its indisputable part in oil’s resurrection, said Thomas Varga of oil broker PVM.

Even so, despite the rally, Brent and US crude remained in contango, a structure in which oil for prompt delivery trades at a discount to crude for delivery later, suggesting a well supplied physical market. He added, it is a really interesting time. All of this is happening while the market is pretty well supplied, so it’s not like it’s causing mass panic. However, I do foresee if we see a long duration of attacks on these ships, whether it be in the Red Sea or other points around the world, it could cause volatility to the upside later on.

Now also adding support, Russia said on Sunday it would deepen oil export cuts in December by potentially 50,000 barrels per day or more earlier than promised. As the world’s biggest exporters try to support global oil prices. I don’t think that it’s not only supporting oil prices because, quite frankly, Russia needs, and OPeC needs much higher oil prices because they only have so much oil and they know that.

So they’d rather sell it at a lot more than what they’re selling it now. But also they know that there’s ways when the oil prices rise that it can not crush, but really squeeze countries like America. Now, this comes after Moscow suspended about two thirds of loadings of its main export grade euros crude from ports due to a storm and scheduled maintenance on Friday. But still, PVM’s Varga was skeptical of the extent to which Russia will make voluntary output cuts.

He says, in reality, it’s just repackaging weather related halts in exports. And I gotta be honest with you, it’s really not that big of a deal right now. However, the whole Red Sea deal, it’s more than just oil. There is all kinds of goods that pass through that channel right there, so we can start seeing some supply chain issues. But right now, I think it’s just too early to tell.

Hope you got something out of this. Thank you so much. The academic ninja is out. .