28th Dec 2023 14:24
(Alliance News) - Oil prices retreated on Thursday after shipping disruption from Yemeni rebel attacks eased, but Hargreaves Lansdown warned the risks remained elevated.
A barrel of Brent fetched USD78.98 on Thursday afternoon, lower than USD80.15 late Wednesday.
Brent crude dipped well below the USD80-a-barrel level as a US-led effort to deter attacks by Iran-backed Houthi rebels in Yemen in the Red Sea seemed to pay off.
Danish shipping company AP Moller-Maersk, which had temporarily suspended shipment in the Red Sea, has signalled it is ready to resume shipping through Suez Canal.
The Houthi rebels, in solidarity with Hamas, have escalated its drone and missile attacks in the Red Sea since war between Israel and the Palestinian militant group broke out on October 7.
London oil giants Shell and BP had a mixed reaction to falling Brent prices, ticking up 0.1% and falling 0.3% respectively.
"With Maersk now scheduling tankers resuming their passages via and Suez Canal and the red sea, thanks to the reassurance of a US-led maritime force in the region, it’s helped dispel some immediate concerns about supply issues," said Hargreaves Lansdown analyst Susannah Streeter.
"However, tensions remain elevated, with Middle Eastern leaders warning about the conflict widening, with Israel's border with Lebanon, a worrisome hotspot, following attacks by Hezbollah. So, crude prices are staying largely elevated, especially with the US economy showing signs of resilience, boosting the outlook for global demand."
Brent prices were as high as USD94.52 on September 18. In September, Saudi Arabia and Russia, Opec+'s heavyweights, decided to extend their output reductions to end of this year.
The Saudi production maintained a one million barrels per day output reduction, which first took effect in July. Russia's export cut of 300,000 barrels per day was planned to continue for the same period.
Broadly, Opec+ members, including Saudi Arabia and Russia, in June jointly agreed to extend earlier cuts in supply through the end of 2024. The cuts were first announced in April.
By Greg Rosenvinge, Alliance News senior reporter
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