2023-12-29T04:29:31+00:00
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/ Oil is heading towards its largest annual decline since 2020 as the war and OPEC+ production cuts fail to raise prices, with traders concerned that global crude supplies may still outpace demand in the coming quarters.
Brent crude oil has consolidated above $77 per barrel, and is on track to incur weekly, monthly and quarterly losses, while West Texas Intermediate crude oil is trading near $72 per barrel.
Brent has fallen by about 10% this year, while the US index has fallen by approximately the same amount. The broader Bloomberg Commodity Index fell by a similar margin.
Oil prices closed lower yesterday, Thursday, after official US data showed that while crude inventories shrank nationwide last week, inventories in the main hub in Cushing, Oklahoma, rose for the eleventh week, reaching their highest levels since August. US crude production was proceeding at a record rate.
Crude oil is wrapping up a turbulent year, with prices affected by the outbreak of war between Israel and Hamas, as well as speculation that the Federal Reserve has finished raising interest rates as inflation declines. However, despite repeated supply cuts from the Organization of the Petroleum Exporting Countries and its allies, rising production from non-OPEC countries, coupled with concerns about slowing demand growth, combined to push crude oil futures lower.
This month, traders faced rising tensions in the Red Sea after attacks by Houthi rebels on ships in Yemen. Half the world’s fleet of container ships that regularly transit the waterway now avoid the route, and crude oil tankers have been diverted, lengthening journeys and increasing costs.