Oil prices rose in Asian trading on Monday; It rose about 1% in early trading, boosted by declining exports from Russia and Houthi attacks on ships in the Red Sea, raising concerns about oil supply disruptions.
Brent crude futures were up 32 cents, or 0.4%, at $76.87 a barrel by 04:13 GMT, while West Texas Intermediate (WTI) crude was up 34 cents, or 0.5%, at $71.77 a barrel.
Russia said on Sunday it would deepen oil export cuts in December by potentially 50,000 barrels a day or more earlier than promised as the world’s biggest exporters seek to support global oil prices.
This comes after Moscow suspended the loading of nearly two-thirds of its main export grade of Ural crude oil from ports on Friday due to the storm and planned maintenance.
Shipping companies avoid the Suez Canal due to attacks on ships. The world’s largest container shipping firms MSC and A.P. Moller-Maersk said over the weekend they would avoid the Suez Canal as Yemen’s Houthi militants stepped up attacks on commercial ships in the Red Sea.
Bab al-Mandab is one of the world’s most important routes for global seaborne commodity shipments; Crude oil and fuel, particularly from the Gulf, go west via the Suez Canal or the nearby SUMED pipeline, and there are also a variety of commodities heading to Asia, including Russian oil.
Both Brent and WTI ended their longest streak of weekly declines in 5 years with a small gain last week after the US Federal Reserve’s meeting last week raised hopes that interest rate hikes were over and cuts were on the way.
Some say that WTI prices will be recovering towards the $76/78 region.
Crude oil is also getting support from a weaker dollar and larger-than-expected U.S. inventory data, making dollar-denominated oil cheaper for foreign buyers.
Analysts said that oil inventories at Cushing, Oklahoma, the largest U.S. storage hub, have rebounded after approaching operational lows last month due to improved pricing in Texas’ Permian basin and increased crude flows from Canada.
The latest influx of crude oil from both sites pushed Cushing stockpiles up for eight weeks, reached 30.8 million barrels.
