Oil prices gave up their gains during today’s trading, turning red, under pressure from rising inventories and record production in the United States, and with continuing concerns about global trade disruptions in the Red Sea.
A barrel of Brent crude for the nearest delivery fell 0.23% to $79.53 per barrel, at the time of preparing this report, after rising to $80.11 per barrel, early today, and US crude contracts fell 0.23% to $74.06.
US stocks
Yesterday, the US Energy Information Administration said that US crude inventories increased by 2.9 million barrels in the week ending December 15 to 443.7 million barrels, compared to analysts’ expectations in a Reuters poll of a decline of 2.3 million barrels.
She added that US crude oil production increased to a record level of 13.3 million barrels per day last week, up from the previous highest level ever at 13.2 million barrels per day.
Yesterday’s settlement
The two benchmark crude oil prices rose at settlement yesterday, Wednesday, for the third session in a row, with investors feeling concerned about trade disruptions in light of the major shipping companies choosing to move away from the Red Sea and take a longer sea route, which leads to an increase in transportation and insurance costs.
About 12% of global traffic passes through the Red Sea and the Suez Canal, however, analysts say the impact on oil supplies has been limited so far, because the bulk of Middle East crude is exported through the Strait of Hormuz.
