Oil prices rose in the first session of the new year, boosted by a possible disruption of Middle Eastern supplies after the latest attack on a container ship in the Red Sea, and by demand hopes in China. India also increased imports of Saudi oil in December as payment problems pushed its Russian oil purchases to an 11-month low.
Brent crude was up 49 cents, or 0.6 percent, at $77.53 a barrel. U.S. West Texas Intermediate crude was up 36 cents, or 0.5 percent, at $72.01, after both benchmarks gained about $2 in earlier trade, according to Reuters news agency.
At home, on the Multi Commodity Exchange (MCX), oil futures ahead of January 19 expiration last traded 1.41 percent higher at ₹5,942 per bbl, having swung between ₹5,935 and ₹6,148 per bbl during the session, against a previous close of ₹6,027 per barrel.
Read also: India increases oil imports from Saudi Arabia as Russian purchases fall to 11-month low in December
What drives oil prices?
-A Reuters poll of economists and analysts predicted Brent crude would average $82.56 a barrel this year, up slightly from the 2023 average of $82.17, with weak global growth expected to limit demand. Geopolitical tensions, however, could provide price support.
– US helicopters on Sunday repelled an attack by Iran-backed Houthi forces on a Maersk container ship in the Red Sea, sinking three Houthi ships and killing 10 of the military, fueling risks that the Israel-Hamas war could turn into a wider conflict.
-Danish shipping company Maersk said it will decide on Tuesday whether to resume sending ships through the Suez Canal through the Red Sea or reroute them around Africa after the attack, a company spokesman said, according to Reuters.
Read also: Outlook 2024: Oil will hover between $80-$90/barrel in 2024; OPEC+ to dictate trends, experts say
-A wider conflict could close crucial waterways for oil transport. At least four tankers carrying diesel and jet fuel from the Middle East and India to Europe are sailing around Africa to avoid the Red Sea, according to ship tracking data.
-In China, investor expectations for fresh economic stimulus measures rose after manufacturing activity fell for a third month in December, government data showed on Sunday. Any such stimulus could boost oil demand and support crude prices.
-India’s oil imports from Russia in December fell between 16 percent and 22 percent, according to Reuters. Indian Oil Corp, which was set to acquire the Sokol oil, had to withdraw from its inventory and buy from the Middle East to make up the shortfall. Saudi oil imports, however, rose by 4 percent.
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Published: 02 Jan 2024, 22:03 IST