Jakarta, CNBC Indonesia – World crude oil prices closed lower or fell in trading last Friday because tensions in the Red Sea offset the possibility of an increase in Angola’s production in the future.
In trading Friday (22/12/2023), the price of WTI crude oil closed down 0.45% at US$73.56 per barrel, likewise the price of Brent crude oil closed down 0.40% to US$79.07 per barrel. barrel.
However, weekly oil price movements are still in a positive trend. WTI crude oil recorded a rise of 2.98% in the week, as did Brent crude oil which shot up 3.29%.
Oil prices fell in trading Friday ahead of the long Christmas holiday and weekend amid expectations Angola could increase production after leaving OPEC. However, oil prices still posted gains for the week, driven by positive US economic news and concerns that the Houthi ship attack would increase the cost of oil supplies.
This saw both oil benchmarks rise around 3% for the week after rising less than 1% last week.
In the Middle East, more aircraft carriers say they are avoiding the Red Sea because of attacks on ships by the Iran-backed Houthi militant group, which they say is a response to Israel’s war on Gaza.
Major shippers Maersk and CMA CGM said they would charge additional fees related to ship rerouting.
The attack has caused disruption in the Suez Canal, which handles about 12% of world trade.
“An immediate supply cutoff is not the only reason oil prices will be moved by the Red Sea situation, freight rates and insurance costs will also increase,” said PVM analyst John Evans, quoted by Reuters.
Meanwhile in Africa, Angola’s decision to leave the Organization of the Petroleum Exporting Countries (OPEC) could pave the way for Beijing to increase investment in the country’s oil and other sectors. Angola produces about 1.1 million barrels of oil per day.
“Angola’s oil production will take time to ramp up even if China takes major action,” said Phil Flynn, an analyst at Price Futures Group, noting that U.S. inflation data and Houthi attacks in the Red Sea should be better. supports oil prices compared to future increases in Angolan production.
Meanwhile in Iraq, Oil Ministry spokesman Asim Jihad confirmed Iraq’s support for the OPEC+ agreement and its commitment to voluntary oil cuts. OPEC+ includes OPEC and its allies such as Russia.
Meanwhile from the United States (US), the main inflation figure was lower than expected, increasing investor optimism that the US Federal Reserve (The Fed) will lower borrowing costs next year.
The core personal consumption expenditures (PCE) price index, excluding volatile food and energy prices, increased 0.1% in November 2023, up 3.2% from a year ago, according to a Commerce Department report on Friday.
Economists surveyed by Dow Jones expected increases of 0.1% and 3.3%, respectively.
Expectations that the Fed will likely cut interest rates next year also helped send the US dollar down to its lowest level since July against a basket of other currencies for the second day in a row.
In trading Friday (22/12/2023) the US dollar index fell 0.14% to 101.69. A weaker dollar could increase oil demand by making fuel more expensive for buyers using other currencies.
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(saw)
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2023-12-24 00:30:00
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