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Crude Oil Lower On Net Despite Continued Red Sea Disruption

COMMODITIES
  • Crude futures are off lows but have still softened through the day despite continued disruption in the Red Sea, driven by a stronger dollar and a lack of material effects on supply due to diversions around the Cape of Good Hope.
  • The Red Sea remains too dangerous for merchant ships to pass due to Houthi attacks according to shipping trade group BIMCO citing the US Navy.
  • Navcent confirmed on X that the US-owned Gibraltar Eagle container ship had suffered a missile attack from Houthi rebels at 1pm GMT Jan. 15 in the seas southeast of Aden. No damage is reported. On the matter, about 209 tankers or 4% of the active tanker fleet are caught up in Red Sea escalations according to an Oil Brokerage note Sunday.
  • The discount on Western Canadian Select v WTI narrowed by $1.20/b to $17.75/b, sources told Bloomberg, after the country’s energy regulator approved a variance request to the Trans Mountain Pipeline.
  • WTI is -0.5% at $72.32 whilst Brent is -0.3% at $78.04, both remaining within last week’s range and not troubling technical levels.
  • Gold is +0.3% at $2055.35 despite a stronger USD, with the yellow metal buoyed by increased geopolitical risks following Houthi strikes. Resistance is seen at $2064.0 (Jan 5 high).

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