Crude Oil Prices Rise Amid Concerns Over Red Sea Attacks

Crude oil futures experienced an uptick on Monday, driven by concerns over supply disruptions from the Middle East due to attacks on shipping in the Red Sea by Houthi rebels.

Oil major BP PLC announced that it would temporarily halt all transits through the Red Sea as a precautionary measure to ensure worker safety. However, BP did not provide an immediate comment upon request.

Here are the latest crude oil prices:

• West Texas Intermediate crude for January delivery was up 49 cents, or 0.7%, at $71.92 a barrel on the New York Mercantile Exchange.
• February Brent crude, the global benchmark, rose by 60 cents, or 0.8%, reaching $77.15 a barrel on ICE Futures Europe.

Both WTI and Brent experienced gains last week, breaking a streak of seven consecutive weekly declines. These gains were a direct result of the attacks on ships in the Red Sea by Iran-backed Houthi rebels.

In the past week, crude prices initially rose slightly due to concerns over a potential conflict following an attack by Hamas on southern Israel. However, prices quickly dropped to a six-month low before rebounding slightly.

Analysts also attribute the recent increase in crude prices to last week's Federal Reserve meeting. The meeting signaled that interest rates have likely reached their peak and reinforced market expectations for rate cuts in 2024. This favorable outlook for the economy has provided support for crude oil prices.

According to analysts at Sevens Report Research, the dovish stance taken by the Fed has instilled hope for a soft landing, while mixed economic data has not been "bad enough" to reignite fears of a hard landing.

In summary, ongoing concerns surrounding attacks on shipping in the Red Sea have contributed to an upward trend in crude oil prices. Additionally, factors such as the temporary halt of transits by BP and the recent dovish Fed decision have further bolstered market expectations.