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The price of oil falls 2% amid concerns about attacks in the Red Sea

2023-12-28 08:25:00, Kosova & Bota CNA
The price of oil falls 2% amid concerns about attacks in the Red Sea
Illustrative photo

Oil prices fell nearly 2% on Wednesday, erasing the previous day's gains, as investors closely watched developments in the Red Sea, where merchant ships have returned despite further attacks on Tuesday.

Crude oil was sold at $79.65 per barrel while the lowest grade was sold at $74.11 per barrel.

Danish company Maersk said it planned shipments of several dozen ships through the Suez Canal and the Red Sea in the coming weeks, after earlier this month it called for a temporary halt following attacks by Yemen's Iran-backed Houthi group.

French carrier CMA CGM also said it was resuming shipping through the Red Sea following the deployment of a multinational military force to the region.

"I think we have to wait and see if increased maritime patrols and rerouting of ships will lead to a decline in attacks," said Callum Macpherson with investment group Investec.

The possibility of a prolonged Israeli military campaign in the Gaza Strip remains the main driver of the oil market. Israeli forces pounded central Gaza by land, sea and air on Wednesday, a day after Israel's chief of staff, Herzi Halevi, told reporters the war would continue "for many months."

Meanwhile, oil shipments at the Russian Black Sea port of Novorossiisk were suspended due to a storm. However, Kazakhstan's Energy Ministry said the Caspian Pipeline Consortium (CPC) terminal near the port was open.

In the United States, crude oil supplies rose last week by 1.84 million barrels, according to market sources citing American Petroleum Institute figures on Wednesday.

Oil output in Russia, the world's third-largest producer behind the United States and Saudi Arabia, is expected to be stable or rise next year as Moscow circumvents Western sanctions, analysts said./ VOA





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