High oil prices
Reuters – Oil prices rose by more than a dollar a barrel on Tuesday, extending gains for the second session in a row after attacks by the Yemeni Houthi group allied with Iran on ships in the Red Sea disrupted maritime trade and forced companies to change the course of their ships.
Brent crude futures rose $1.28, or 1.6%, to reach $79.23 per barrel at settlement, the highest price since December 1.
US West Texas Intermediate crude futures for January delivery, which expired after settlement on Tuesday, rose 97 cents, or 1.3%, to $73.44 a barrel, which is also the highest price in two weeks.
On Tuesday, the United States announced the formation of a task force to protect trade in the Red Sea from attacks by the Iran-backed Houthis. The Houthis vowed to defy the US-led naval mission and continue striking Israeli targets in the region.
The price of crude oil rose about 2% on Monday after a Norwegian-owned ship was attacked and BP announced the suspension of all transportation operations through the Red Sea. Other shipping companies have made similar announcements since then.
About 12% of global shipping traffic passes through the Red Sea and then to the Suez Canal.
“Ships are now being rerouted via the Cape of Good Hope, which will not only increase sailing time by about 10 days, but will result in costs of about $1 million additional in fuel for each round trip between the Far East and Northern Europe,” said Peter Sand, senior analyst at Zeneta. .
Attacks on shipping have increased the risk premium, but other analysts noted that these incidents are unlikely to impact supply.
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2023-12-19 20:04:31
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