empty
19.12.2023 06:24 AM
The market is in panic: Oil prices rose by 2% after the events in the Red Sea

This image is no longer relevant

On Monday, the price of oil rose almost 2% due to investor concerns about disruptions in maritime trade and increased delivery costs following an attack by the Houthi group on ships. A Norwegian vessel was attacked, and BP announced a temporary suspension of water transit. Other companies also declared their avoidance of this route.

The price of Brent crude futures increased by 17 cents (0.2%) to $78.12 per barrel. The futures contract for West Texas Intermediate crude rose by 14 cents to $72.61 per barrel, and the more active contract for the following month went up by 9 cents (0.1%) to $72.91.

Favad Razaqzada, an analyst at StoneX, noted the need to account for increased delivery costs, as many oil tankers cease voyages through the Red Sea. Approximately 15% of global shipping passes through the Suez Canal. On Monday, the London marine insurance market expanded the high-risk area in the Red Sea, leading to increased insurance premiums.

Last week, there was a slight increase in contract prices after a seven-week decline. This was linked to the meeting of the Federal Reserve System of the USA, which raised expectations of an end to interest rate hikes and a forthcoming decrease.

However, ample oil supplies limited price increases on Monday. Brent crude and US immediate delivery oil traded at a discount to future deliveries, indicating a healthy supply in the physical market.

Prices for US oil for January delivery traded 40 cents lower than February delivery prices, marking the largest spread since November 2020.

Meanwhile, Saudi Arabia's crude oil exports in October reached a four-month high, according to data from the Joint Organizations Data Initiative.

Analysts believe that some short position closures may have occurred in the markets. Financial managers reduced net long positions in US oil futures and options for the eleventh consecutive week until December 12, as reported by the US Commodity Futures Trading Commission.

According to the US Energy Information Administration (EIA), oil production in the largest US shale regions will decrease for the third consecutive month in January, while production in the Upper Permian Basin will reach a record high for the eighth consecutive month.

"Considering the current rally and positive dynamics of the past week, there is a likelihood that oil has reached its bottom," said Razaqzada of StoneX.

Thomas Frank,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Robinhood drops from the S&P 500 — domino effect hits global markets

Robinhood shares fell after the trading platform was excluded from the S&P 500. Warner Bros. stock declined following the company's announcement of plans to restructure its business. European stocks slid

14:54 2025-06-11 UTC+2

Daily contrasts: Nikkei rises, EUR slips, global markets hold breath ahead of US-China talks

J.M. Smucker declines. The World Bank cuts its 2025 global growth forecast. Nikkei advances, while Wall Street futures and the euro weaken. The dollar shows little movement, and bond markets

14:31 2025-06-11 UTC+2

US Market News Digest for June 11

The US stock market has reached projected levels and now enters a "quiet scouting phase" as investors await the release of key inflation figures. The upcoming data

Ekaterina Kiseleva 13:57 2025-06-11 UTC+2

Contrasts of the day: Nikkei up, euro down, world holds breath ahead of US-China talks

J.M. Smucker falls after pessimistic forecast World Bank cuts global growth forecast for 2025 Nikkei up, Wall Street futures and euro fall Dollar little changed, bonds await CPI and auction

Thomas Frank 07:48 2025-06-11 UTC+2

Rates rise: markets Await CPI, Trump clashes with Musk, Qualcomm acquires Alphawave

The May CPI report is set for release on Wednesday. A budget bill takes center stage amid a public disagreement between Trump and Musk. Alphawave surged following news

14:05 2025-06-10 UTC+2

US Market News Digest for June 10

The S&P 500 and Nasdaq 100 indices posted notable gains, driven by upbeat expectations ahead of the upcoming US-China trade negotiations. Investors are betting on a potential easing of tariffs

Ekaterina Kiseleva 12:52 2025-06-10 UTC+2

Robinhood Drops From S&P 500 — Domino Effect Hits Entire Market

Robinhood Falls After Platform Expelled From S&P 500 Warner Bros. Shares Fall After Company Says Plans to Split Business European Stocks Fall on UBS Drop, U.S.-China Trade Talks Loom McDonald's

Thomas Frank 12:49 2025-06-10 UTC+2

Rates rise as markets await CPI, Trump spar with Musk, Qualcomm acquires Alphawave

May CPI report due Wednesday Budget bill in spotlight amid Trump-Musk rift Alphawave jumps on Qualcomm takeover plans WPP falls after CEO resignation announcement S&P 500 just over 2% above

Thomas Frank 11:49 2025-06-09 UTC+2

Clash of the Titans: Musk vs. Trump as Investors Count Losses

Dow -0.25%, S&P 500 -0.53%, Nasdaq -0.83% Tesla Falls as Trump-Musk Public Feud Grows Initial Jobless Claims Rise for Second Week in a Row Adidas, Puma Shares Fall After Lululemon

Thomas Frank 11:45 2025-06-06 UTC+2

Diverging markets: US stocks stall, Asia accelerates

Dow: -0.22%; S&P 500: flat; Nasdaq: +0.32%. The US services sector contracted in May for the first time in nearly a year. CrowdStrike slumped on a downbeat revenue forecast

12:40 2025-06-05 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.