Oil stabilizes and a barrel of Brent hovers near $80

Oil stabilizes and a barrel of Brent hovers near $80

Oil prices remained stable on Thursday as Brent hovered around $80 a barrel. However, concerns regarding disruptions to global trade in the Red Sea persisted despite record production in the United States and increasing inventories.

Price changes

At 09:14 GMT, Brent crude futures increased by 0.1% to $79.80 per barrel, while US West Texas Intermediate crude rose to $74.26.

According to the US Energy Information Administration, the country’s crude oil inventories rose by 2.9 million barrels in the week ending December 15, reaching 443.7 million. This is contrary to the expectation of a 2.3 million barrel decrease, as predicted in a Reuters poll conducted among analysts.

US crude oil production reached a record high of 13.3 million barrels per day last week, surpassing the previous high of 13.2 million barrels per day.

The two benchmarks rose for the third consecutive day during yesterday’s settlement, Wednesday. Investors are worried about trade disruptions because major shipping companies have decided to avoid the Red Sea and take a longer sea route. This decision is leading to increased transportation and insurance costs.

It is estimated that approximately 12% of the world’s total traffic flows through the Red Sea.

Analysts suggest that the impact on oil supplies has been limited thus far as most of the Middle East’s crude is transported via the Strait of Hormuz.