Oil increases by almost 1% after the raid and diversion of a Red Sea tanker

 Oil increases by almost 1% after the raid and diversion of a Red Sea tanker

After seven weeks of declines, both benchmarks for crude oil registered slight rises. The US Federal Reserve meeting last week fuelled optimism that interest rate hikes are coming to an end and that cutbacks are imminent.

Varga of PVM expressed doubts about how far Russia will go with voluntary output reduction.

Oil prices were constrained by worries about sufficient supplies and skepticism about Russia's proposal to reduce shipments in December, but oil surged more than 1% on Monday as a result of Houthi assaults on ships in the Red Sea. made a profit.

Following an assault on the Norwegian-owned ship on Monday in the Red Sea, oil giant BP said that it has temporarily suspended all operations across the region. Over the weekend, several maritime firms said they would steer clear of the route.

At 1307 GMT, U.S. West Texas Intermediate oil increased 80 cents, or 1.1%, to $72.23, while Brent crude futures increased $1.40, or 1.8%, to $77.95 a barrel.

After seven weeks of declines, both benchmarks for crude oil registered slight rises. The US Federal Reserve meeting last week fuelled optimism that interest rate hikes are coming to an end and that cutbacks are imminent.

"The increase in geopolitical risk premium, as regular hostilities threaten commercial vessels in the Red Sea by Iran-backed Houthi rebels, plays its unquestionable role in oil's resurgence," Tamas Varga of PVM, an oil trader, said said Tamas Varga of PVM, an oil dealer.

Nevertheless, despite the uptick, the relationship between Brent and U.S. crude continues to be in contango, wherein oil for immediate delivery trades at a discount to petroleum for later delivery, indicating a physically stocked market. makes recommendations.

In an effort to strengthen oil prices globally, Russia, the world's largest oil exporter, added assistance on Sunday by announcing that it would reduce oil shipments in December by 50,000 barrels per day or more early than planned. Are.

It happened after Moscow on Friday halted the storm and planned maintenance-related loading of around two thirds of its primary export grade Ural crude from ports.

Varga of PVM, meanwhile, remained pessimistic about the degree to which Russia will implement voluntary output cutbacks.

"It's really just a re-packaging of weather-related disruptions in exports," he said.