Crude Little Changed As More Red Sea Trouble Offset By Higher US Inventories

Oil prices are only up moderately during APAC trading today rising almost a percent on Tuesday as geopolitical tensions persist. But a pickup in US crude inventories has kept a lid on prices. WTI is 0.2% higher at $73.47/bbl after an intraday high of $73.72 earlier. Brent has been trending lower since its high at $78.69 and is now up 0.2% to $78.71. The USD index is moderately lower.

• US Central Command reported that six missiles were fired by Houthis at shipping yesterday in the Gulf of Aden and the southern Red Sea. MV Star Nasia was hit but there was only minor damage. With no end in sight for these attacks, more ships are taking the longer route around southern Africa. This has provided support to oil prices amid concerns of excess supply.
• A ceasefire deal in Gaza would likely drive crude lower. Qatar said that a draft has been presented to Hamas and the response so far was “positive”.
• Bloomberg reported that US crude inventories rose 674k barrels, less than expected, according to people familiar with the API data. While gasoline stocks rose 3.652mn, distillate saw a drawdown of 3.7mn. The official EIA data is out later today.
• Later the Fed’s Harker, Kugler, Collins, Barkin, Bowman, Remache and Nordstrom all speak. On the data front there is December US trade and consumer credit and German IP.