empty
19.12.2023 06:24 AM
The market is in panic: Oil prices rose by 2% after the events in the Red Sea

This image is no longer relevant

On Monday, the price of oil rose almost 2% due to investor concerns about disruptions in maritime trade and increased delivery costs following an attack by the Houthi group on ships. A Norwegian vessel was attacked, and BP announced a temporary suspension of water transit. Other companies also declared their avoidance of this route.

The price of Brent crude futures increased by 17 cents (0.2%) to $78.12 per barrel. The futures contract for West Texas Intermediate crude rose by 14 cents to $72.61 per barrel, and the more active contract for the following month went up by 9 cents (0.1%) to $72.91.

Favad Razaqzada, an analyst at StoneX, noted the need to account for increased delivery costs, as many oil tankers cease voyages through the Red Sea. Approximately 15% of global shipping passes through the Suez Canal. On Monday, the London marine insurance market expanded the high-risk area in the Red Sea, leading to increased insurance premiums.

Last week, there was a slight increase in contract prices after a seven-week decline. This was linked to the meeting of the Federal Reserve System of the USA, which raised expectations of an end to interest rate hikes and a forthcoming decrease.

However, ample oil supplies limited price increases on Monday. Brent crude and US immediate delivery oil traded at a discount to future deliveries, indicating a healthy supply in the physical market.

Prices for US oil for January delivery traded 40 cents lower than February delivery prices, marking the largest spread since November 2020.

Meanwhile, Saudi Arabia's crude oil exports in October reached a four-month high, according to data from the Joint Organizations Data Initiative.

Analysts believe that some short position closures may have occurred in the markets. Financial managers reduced net long positions in US oil futures and options for the eleventh consecutive week until December 12, as reported by the US Commodity Futures Trading Commission.

According to the US Energy Information Administration (EIA), oil production in the largest US shale regions will decrease for the third consecutive month in January, while production in the Upper Permian Basin will reach a record high for the eighth consecutive month.

"Considering the current rally and positive dynamics of the past week, there is a likelihood that oil has reached its bottom," said Razaqzada of StoneX.

Thomas Frank,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

Wall Street on edge: Trump's Fed visit, UnitedHealth probe, rising S&P and Nasdaq

Thursday's session ended with record closes for the S&P 500 and Nasdaq. Investor optimism was fueled by strong earnings from Alphabet, boosting appetite for other leading tech names linked

12:05 2025-07-25 UTC+2

US Market News Digest for July 25

US equity benchmarks closed the day mixed: the S&P 500 and Nasdaq posted modest gains, while the Dow Jones edged lower. Investor sentiment remains cautious amid uncertainty over the Fed's

Ekaterina Kiseleva 11:56 2025-07-25 UTC+2

Wall Street on edge: Trump visits Fed, UnitedHealth probe, S&P and Nasdaq grow

Thursday's trading session closed with historic peaks for both the S&P 500 and Nasdaq indices, as standout results from Alphabet sparked renewed excitement for shares in artificial intelligence-driven tech giants

Thomas Frank 11:06 2025-07-25 UTC+2

Always zero tariffs for America and plenty of Bitcoins for president. Traders' calendar on July 24-25

In his characteristic style, Donald Trump presented what he called the "greatest trade deal in history," claiming that Indonesia and Japan had opened their markets to American business

Svetlana Radchenko 12:09 2025-07-24 UTC+2

Bitcoin may drop. BTC traders may face price traps

The crypto market is currently experiencing volatility, but many analysts anticipate an intensifying storm. They are warning of potential price traps in Bitcoin's dynamics, fearing a major collapse

Larisa Kolesnikova 12:05 2025-07-24 UTC+2

US Market News Digest for July 24

The US economy continues to demonstrate resilience, fueling optimism around corporate earnings. Investors are hopeful for strong results, particularly from the "Magnificent Seven," while emphasizing the importance of tariffs

Ekaterina Kiseleva 11:52 2025-07-24 UTC+2

Shifting market trends: Thermo Fisher soars, Texas Instruments sinks

Tariffs on Japanese cars have been cut from 27.5% to 15%. Thermo Fisher shares surged. Texas Instruments stock tumbled. Tesla reported, with investors now bracing for a revenue drop. S&P

11:09 2025-07-24 UTC+2

Why Thermo Fisher Stock Is Soaring, Texas Instruments Is Falling: Breaking Down New Market Trends

Japanese Auto Tariffs Cut 27.5% to 15% Thermo Fisher Shares Surge, Beating Wall Street Expectations Texas Instruments Shares Plunge as Tariff Uncertainty Impacts Demand Tesla Reports After Hours, Investors Brace

Thomas Frank 10:35 2025-07-24 UTC+2

US Market News Digest for July 23

The S&P 500 remains in a state of uncertainty despite positive developments such as new trade deals with Japan and other nations. Investors remain concerned about a potential slowdown

Ekaterina Kiseleva 13:03 2025-07-23 UTC+2

Wall Street's new blow: GM loses $1 billion, RTX shocks investors

Tariffs cut GM's profit by $1 billion, shares plunge. RTX tumbles after cutting 2025 profit forecast. S&P 500 +0.06%, Nasdaq -0.39%, Dow +0.40%. Nikkei, EU stocks rise as US-Japan deal

11:54 2025-07-23 UTC+2
Can't speak right now?
Ask your question in the chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.