By Adedapo Adesanya
Oil appreciated on Wednesday following a bigger-than-expected weekly withdrawal from US crude stockpiles and on worries about the security of Middle East oil supplies after a tanker attack in the Red Sea.
Brent rose by $1.02 or 1.4 per cent to settle at $74.26 a barrel while the US West Texas Intermediate (WTI) crude increased by 86 cents or 1.3 per cent to quote at $69.47 per barrel.
A tanker in the Red Sea off Yemen’s coast was fired on by gunmen in a speedboat and targeted with missiles in what is the latest incident to threaten the shipping lane after Yemeni Houthi forces warned ships not to travel to Israel.
The Iran-aligned Houthi group has sought to support their Palestinian ally Hamas in the Gaza war by firing missiles at Israel and threatening shipping in the busy Bab al-Mandab Strait, next to Yemen at the southern entrance to the Red Sea.
There was no immediate claim of responsibility for the latest incidents in the busy shipping route off Yemen’s coast.
Houthis have threatened to close the whole area to shipping due to the ongoing Israeli onslaught in Gaza. The group, a few weeks ago, declared war on Israel and sent several ballistic missiles toward Israel.
The US Energy Information Administration (EIA) reported an estimated inventory draw of 4.3 million barrels for the week to December 8.
This compared with a draw of 4.6 million barrels for the previous week, which, however, combined with builds in gasoline and middle distillate inventories to put a lid on prices.
A day earlier, the American Petroleum Institute (API) estimated a draw in crude oil inventories of 2.35 million barrels for the week to December 8, along with a robust build in gasoline inventories and a modest one in middle distillates.
Crude prices held gains after the US Federal Reserve released a statement that it would hold interest rates steady as expected.
The central bank signalled an end to monetary policy tightening to fight inflation and lower borrowing costs coming in 2024.
The market will be watching the next moves as nations reach a historic deal at the COP28 conference to begin reducing global consumption of fossil fuels.
Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said he was in agreement with the COP28 presidency on the final deal, adding it would not affect the kingdom’s hydrocarbon exports.
The Organisation of the Petroleum Exporting Countries (OPEC) on Wednesday said it remained cautiously optimistic about 2024 oil market fundamentals and blamed “exaggerated concerns” about demand for a recent drop in prices.
In its monthly report, the cartel said it remained “cautiously optimistic about the fundamental factors affecting oil market dynamics in 2024” and said speculators had played a major role in pushing prices lower.
OPEC kept its forecast for world oil demand growth in 2023 steady at 2.46 million barrels per day. In 2024, OPEC sees demand growth of 2.25 million barrels per day, also unchanged from last month.
Modupe Gbadeyanka