US commercial inventories
US commercial crude inventories fell by 2.5 million barrels last week to their lowest level since October, according to the Energy Information Administration. While oil exports have been strong, imports are continuing to rise as well, as refiners make the most of cheap and abundant Canadian supplies. Among the issues also highlighted is that the freezing weather has curbed some shale oil production in the United States, including from the Bakken region.
US raids in Yemen exacerbate shipping chaos in the southern Red Sea
“It may be that US crude oil inventory drawdowns have finally forced the market to anticipate a decline in supplies in the Bakken and, therefore, assign a slightly higher risk premium to the Middle East crisis as well,” said Vandana Hari, founder of Vanda Insights in Singapore.
She added that in the Red Sea, “any incident that causes serious damage to lives and property, at sea or on land, may become the tipping point.”
The overarching worry about tensions in the Middle East — including the war between Israel and Hamas and the strikes between Iran and Pakistan this week — is that Tehran will be drawn directly into the conflict. This could jeopardize crude oil production or further hinder flows of goods from the region, which accounts for about a third of global supplies.
2024-01-19 02:26:40
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