Crude Prices Fell As Concern Eased About Red Sea Shipping Disruptions

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  • Crude oil prices registered a decline of -0.68%, settling at 6007, as concerns eased over shipping disruptions along the Red Sea route.
  • Crude oil inventories increased by 1.837 million barrels during the week ending December 22, 2023, marking the largest weekly gain.
  • The crude oil market is currently under fresh selling pressure, with a gain in open interest by 3.49% to settle at 14803.

Crude oil prices registered a decline of -0.68%, settling at 6007, as concerns eased over shipping disruptions along the Red Sea route, despite ongoing tensions in the Middle East, reports Investing.

Denmark’s Maersk announced plans to route almost all container vessels sailing between Asia and Europe through the Suez Canal, with only a handful being diverted around Africa. In the US, crude oil inventories increased by 1.837 million barrels during the week ending December 22, 2023, marking the largest weekly gain since November 17.

The build-up follows a 0.939 million barrels rise in the previous week. Meanwhile, the US finalized contracts to purchase 3 million barrels of oil to replenish the Strategic Petroleum Reserve (SPR). The average cost per barrel was $77.31, below the 2022 average of $95 per barrel. This marks part of the effort to rebuild the SPR after last year’s historic sale.

Despite concerns about global oil supply disruptions, the market is responding to evolving geopolitical dynamics and inventory data. Exports of four main Nigerian crude oil grades in February are expected to average around 657,000 barrels per day, a slight decrease from the previous month.

From a technical perspective, the crude oil market is currently under fresh selling pressure, with a gain in open interest by 3.49% to settle at 14803. Support is identified at 5960, and a breach below could lead to a test of 5914. On the upside, resistance is observed at 6057, and a move above could see prices testing 6108.

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Source: Investing

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