Oil prices are still volatile amid geopolitical risk

On Tuesday, crude oil prices were mixed amid concerns about supply disruptions in the Red Sea. Brent, which is the benchmark oil for two-thirds of world production, was up $0.08 (+0.10%) at 1125 GMT to $79.15 per barrel. West Texas Intermediate (WTI), which is the main benchmark oil for North America, fell by $0.14 (-1.19 percent) to $73.42 per barrel. Brent closed the week with a gain of 3.29 percent, while WTI saw a rise of 2.98 percent.

The price of Russian Sokol also increased by $0.14 (+1.19 percent) to $73.36. The price of Arab Light increased by $0.15 (+0.18%) to $82.03 per barrel. Opec Basket, on the other hand, fell to $80.84 per barrel after a $0.40 (-0.49%) decrease. The OPEC Reference Basket (ORB) is composed of the following crude oils: Saharan Blend; Girassol; Djeno; Zafiro; Rabi Light; Iran Heavy Basra Light Kuwait Export Es Sider Bonny Light Arab Light Murban Merey.

Oil futures had earlier posted their biggest weekly gain in October due to concerns about supply disruptions at the Red Sea. The attacks by the Houthi militants on ships, who claim to be responding to Israel’s Gaza war, have caused more maritime carriers to avoid the Red Sea. These attacks have disrupted global trade through the Suez Canal which accounts for about 12 percent worldwide. Hapag-Lloyd of Germany and OOCL from Hong Kong have both joined a list of shipping companies that have announced that they will avoid the Red Sea. Hapag-Lloyd plans to reroute 25 vessels by the end of the year away from the Red Sea due to the increased freight rates and stock levels.

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