Bab el-Mandeb Closure Threat Not Enough To Prevent 1% Dip In Oil
DespiteTehranasking the Houthi movement inYemento prep for closing theRed Seato oil transit in retaliation for the continuedU. S. bombing ofIran, oil prices on Thursdaysettledabout1 percentlower. Brent settled. . .
DespiteTehranasking the Houthi movement inYemento prep for closing theRed Seato oil transit in retaliation for the continuedU. S. bombing ofIran, oil prices on Thursdaysettledabout1 percentlower. Brent settled down72 cents, or about0. 9 percent, to$84. 23per barrel, and West Texas Intermediate settled down65 cents, or0. 8 percent, at$78. 95per barrel. Ed Hayden-Briffett, oil research analyst forThe Officials,explained the dip by remarking, "Investor positioning in the oil market was very short when the situation started to worsen in theMiddle Eastthis week, and that seems to have slowed as investors that got burnt in the rally cut their short positions earlier in the week. "Analysts worried over the prospect of another waterway being blocked (the Houthis will supposedly shut theBab el-Mandebgateway if the U. S. bombs Iranian power infrastructure): “This threat raises the serious risk of both of the Middle East's primary oil export routes being disrupted at the same time," saidAlex Hodes, director of energy market strategy atStoneX. Wael Makarem, financial markets strategist lead atExness, agreed, adding that blocking Bab el-Mandeb “would significantly amplify supply chain stress. ”ButEdmund Fitton-Brown, a former British ambassador to Yemen and senior fellow at theFoundation for Defense of Democracies,saidsuch a strategy would “likely draw international anger and likely result in Israeli and U. S. strikes onSana’aandHodeida. ”Thursday also saw discussions about just how much the U. S. /Iran war could grow among analysts concerned with fundamentals as well as those swayed by sentiment; they seemed to be assured by U. S. vice-presidentJ. D. Vancedeclaring that a ground war was out of the question, butHiroyuki Kikukawa, chief strategist ofNissan Securities Investment,toldmedia, “While mediation efforts by neighbouring countries continue and the consensus view is that a full-scale war is unlikely, WTI could still rise to$85–$87depending on how the conflict develops. ”For its part,Goldman Sachscovered all bases: it said Brent could exceed$110in the fourth quarter if the Gulf export recovery continues to stall, but could fall into the$60s by year-end if tensions ease. In other oil news on Thursday,Chevronwas preparing to sign two memoranda of understanding that will move it closer to developingIraq’sWest Qurna 2oilfield and theNassiriyaproject. The company is alsoreportedlyworking with Iraq on technical studies for new export pipelines that would allow crude to reach theMediterraneanwithout passing through theStrait of Hormuz. Ship & Bunker News TeamTo contact the editor responsible for this story email us at[email protected]