Oil Summary at European Close: Crude Extends Gains

Crude prices have built on their gains from yesterday driven by shipping disruptions in the Red Sea and a falling US dollar. A growing numbers of tanker companies to pause the Red Sea route to instead chose the longer voyage via the Cape of Good Hope.

• Brent FEB 24 up 1.5% at 79.13$/bbl
• WTI JAN 24 up 1.4% at 73.5$/bbl
• The API oil inventory data is due for release today at 16:30 ET.
• Several companies shipping energy products have announced to pause shipments via the Red Sea, including Equinor and BP, sparking fears for supply passing through the Suez Canal.
• The US has put together a new naval task force to patrol the troubled area and protect commercial vessels. The Houthis warned the US they will be legitimate targets if they interfere in its ongoing operations against Israel-linked vessels
• Disruption to energy flows through the Bab-El-Mandeb strait is unlikely to have a large impact on crude oil and LNG prices according to Goldman Sachs. Production should not be directly affected due to vessel redirection opportunities.
• China's Sinochem Corp has agreed to buy a million barrels of heavy Venezuelan Merey crude at a discount of 11$/bbl to dated Brent crude on a DES basis for arrival in December according to Reuters sources.
• Russia’s seaborne crude exports climbed on a four-week average basis, according to Bloomberg data, despite weekly flows falling amid paused shipments from Primorsk.
• new OPEC+ meeting is possible in the near future for the group to discuss the market situation but currently there is no need for new decisions, Russia Deputy PM Alexander Novak said, cited by Interfax.