HOUSTON: Oil prices shed value during the first session of 2024, on the back of interest rate jitters and as concerns eased that tensions in the Red Sea could disrupt supplies.

Brent crude was down 45 cents, or 0.6 per cent, at $76.59 a barrel at 13:15 p.m. ET (18:15 GMT). US West Texas Intermediate crude was down 60 cents, or 0.8pc, at $71.05.

Prices rose briefly in early trade after attacks on vessels in the Red Sea by Houthi rebels over the weekend, and the reported arrival of an Iranian warship on Monday. Both benchmarks had risen around $2 on Tuesday before edging back down.

“The market is correcting itself in so far as there have been no supply disruptions and they think it is unlikely that the Iranian warship will engage with American warships,” said Andrew Lipow, president of Lipow Oil Associates.

“Clearly, the oil market will move higher if shots are fired.”

U.S. helicopters on Sunday repelled an attack by Iran-backed Houthi forces on a container vessel operated by Danish shipper Maersk in the Red Sea. An Iranian warship had entered the Red Sea on Monday, according to the semi-official Tasnim news agency.

Denmark’s Maersk and German rival Hapag-Lloyd said their container ships would keep avoiding the Red Sea route that gives access to the Suez Canal.

A wider conflict could close crucial waterways for oil transportation.

Published in Dawn, January 3rd, 2024