Oil prices jump on disruption fears after latest Red Sea attack

Oil prices rose more than 2% in the first session of the New Year, boosted by potential disruption to Middle East supply after the latest attack on a container ship in the Red Sea and by Chinese demand hopes.

Brent crude rose $1.72, or 2.2%, to $78.76 a barrel by 1115 GMT. U.S. West Texas Intermediate crude was up $1.57, or 2.2%, at $73.22.

A Reuters survey of economists and analysts predicted that 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 cap demand. Geopolitical tensions, however, could provide price support.

U.S. helicopters on Sunday repelled an attack by Iran-backed Houthi forces on a Maersk container vessel in the Red Sea, sinking three Houthi vessels and killing 10 of the militants, fuelling risks of the Israel-Hamas war becoming a wider conflict.

“The oil price may be affected by the escalation … in the Red Sea over the weekend and the peak demand season during China’s spring festival,” said Shanghai-based CMC Markets analyst Leon Li, referring to the Lunar New Year holiday in early February.

via Reuters