The slow recovery of North Dakotan oil output, US strikes on the Houthis in the Red Sea, and drone attacks on Russia sent Brent oil prices up above $80 per barrel early on Tuesday, but new supply from Norway and Libya soon sent prices falling again.
Macroeconomic factors are adding to the headwinds for oil prices, with China posting Q4 GDP figures below expectations and the US set to see a cooling in growth. Friday might be the most entertaining day this week as US inflation data might swing pricing dynamics either way. The continued rerouting of ships from Asia to Europe has been greatly reducing the availability of spot tankers that could be chartered, lifting the price of shipping, especially when it comes to clean products.
As Bloomberg reports, the day rate for shipping a cargo of gasoline from northwest Europe to the US East Coast has tripled since the start of the year, nearing $38,000 per day this week. US and UK forces conducted strikes on eight Houthi targets late Monday, making it even more likely that Red Sea disruptions will be longer than expected as the previous attack on January 11 had triggered a round of retaliatory strikes.
Routing tankers carrying refined products through the Cape adds $1 million to freight costs, equivalent to a $1.5/bbl premium, despite the fact there is no canal passing along the way (the Suez Canal has just hiked its 2024 prices to roughly $500-600,000 per passage).In its latest monthly SPR replenishment plan, the US Department of Energy bought 3.2 million barrels of crude totaling $243 million, with ExxonMobil supplying 1.4 MMbbls, with BP, Macquarie, Phillips 66 and Sunoco joining, too.