Oil market halted uptrend on reports over easing Red Sea tensions

International crude oil benchmarks experienced a modest pullback on Thursday, January 16, 2024, as traders adopted a cautious stance ahead of the impending inauguration of the new US President. The market reacted to reports of easing tensions in the Middle East, a region long considered a flashpoint for global energy disruptions.

Brent crude dropped by 74 cents, settling at $81.29/barrel.

WTI declined by $1.36 to close at $78.68/barrel.

Maritime security officials reported that the Houthi militia's decision to halt attacks, following a ceasefire agreement in Gaza, has eased tensions in the region. These hostilities had previously disrupted critical global shipping routes, significantly inflating transportation costs and exacerbating supply chain challenges. The recent cooling of tensions has tempered market anxiety and raised expectations for a decline in global shipping rates, which could alleviate logistical bottlenecks in the energy sector.

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Written by: Muhammad Hafiz