The downward trend on the oil market has been halted (at least in recent days). It is mainly developments in the US that are keeping oil market players busy. Concerns about safety in the Red Sea also support the market. China's disappointing import figures have almost been forgotten.
Brent crude oil fell to $12 per barrel on Tuesday, December 73,24. That is the lowest level since the end of June. The price has been slowly picking up in recent days. Today, December 14, Brent is at $74,65 per barrel.
A decline in American oil supplies is cited by analysts as an important cause for the recovery in the oil market. According to US government figures, crude oil supplies have shrunk by 4,3 million barrels. That is 650.000 barrels more than the trade expected. The US central bank announced on Wednesday that it would not change interest rates. Before 2024, the Fed indicated that interest rates could be lowered. Lower capital costs stimulate the economy and thus the demand for energy, including oil.
Attacks on ships in the Red Sea by Houthi rebels are making the supply of oil from the Middle East more difficult. The Houthi rebels have more or less intervened in the conflict between Israel and Hamas and attacked ships with a clear link to Israel. Last Sunday, the Houthis made it clear that the link with Israel is no longer an absolute requirement. All (merchant) ships en route to an Israeli port are targets. A fire broke out on a Norwegian oil tanker after the ship was bombarded with missiles from Yemen. Yesterday, according to various sources, another oil tanker was bombarded. By the way, it is not only the oil industry that is getting into trouble. The Red Sea is the main shipping route between Asia and Europe.
China imports less oil
Chinese oil import figures have a price-dampening effect on the oil market. Last week, Chinese imports fell to the lowest level in seven months. That coincided with a peak in US oil production. From that perspective, there may still be room to lower the bottom in the market in the coming days, some analysts say.
The climate summit in Dubai is over. All 198 countries have reached an agreement. It is the first time that a final statement has discussed phasing out fossil fuels. This in a host country that pretty much lives off oil revenues. There are few concerns from the oil sector itself about the final statement. It almost seems to be taken for granted.
The diesel price dropped this week and is around €125 per 100 liters. The lower oil price partly affects the price of distillates. According to some experts, the mild winter weather also plays a role. Domestic fuel oil or diesel for heating is rarely used in the Netherlands anymore, but that is not the case everywhere in Europe.