By Adedapo Adesanya
The crude oil market fell further by 3 per cent on Thursday as more shipping companies said they were ready to transit the Red Sea route, easing concerns about supply disruptions as Middle Eastern tensions stay elevated.
Brent crude futures for March delivery went down by $2.39 or 3% to $77.15 per barrel and the US West Texas Intermediate (WTI) crude futures fell by $2.34 or 3.2 per cent to $71.77 a barrel.
On Wednesday, oil prices dropped nearly 2 per cent as major shipping firms began returning to the Red Sea.
Denmark’s Maersk said it would route almost all container vessels sailing between Asia and Europe through the Suez Canal from now, and divert only a handful around Africa.
France’s CMA CGM is also increasing the number of vessels travelling through the Suez Canal, it said earlier in the week.
Companies had stopped using Red Sea routes and the Suez Canal earlier this month after Yemen’s Houthi militant group began targeting vessels.
Shipping firms are now reviewing whether it is safe to return after the US announced a multinational maritime security initiative in the Red Sea in response to attacks on vessels.
Analysts say the Red Sea route is reopening and will bring supply to market weeks faster.
Others warned that the attacks on ships in the Red Sea have not stopped and are likely to keep markets on edge.
Crude oil prices had moved higher earlier after the Energy Information Administration (EIA) reported an estimated inventory decline of 6.9 million barrels for the week to December 22.
This compared with a sizeable build in crude oil stocks for the previous week, at 2.9 million barrels.
A day earlier, the American Petroleum Institute (API) estimated crude oil inventories had added 1.84 million barrels in the week to December 22.
Prices then fell as traders focused on a bulk of the draw coming from the US Gulf Coast region, where refiners are scrambling to clear inventories to avoid high taxes on storage at the end of the year.
Also, investors expect interest rate cuts in Europe and the US in 2024, which could boost oil demand.
