Oil prices set to end year 10% lower

Oil climbed after falling 3% previous day as more shipping firms prepared to transit Red Sea route

LONDON:

Oil prices are set to end 2023 about 10% lower after two years of gains as geopolitical concerns, production cuts and central bank measures to rein in inflation triggered wild fluctuations in prices.

On Friday, oil climbed after falling 3% the previous day as more shipping firms prepared to transit the Red Sea route. Major firms had stopped using Red Sea routes after Yemen’s Houthi militant group began targeting vessels.

Brent crude futures were up 72 cents, or 0.9%, at $77.87 a barrel at 1420 GMT, the last trading day of 2023, while US West Texas Intermediate (WTI) crude futures were up 76 cents, or 1.1%, at $72.53.

Read More ships carrying oil avoid Red Sea route

Yet the two benchmarks are on track for their lowest year-end levels since 2020, when the pandemic battered demand and sent prices nose-diving.

Production cuts by OPEC+ have proved insufficient to prop up prices, with the benchmarks down nearly 20% from the year’s highs.

OPEC+ is currently cutting output by around six million barrels per day, representing about 6% of global supply.

Published in The Express Tribune, December 30^th, 2023.

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