Oil prices saw minimal changes on December 27 as investors closely monitored developments in the Red Sea. Despite ongoing attacks and heightened tensions in the broader Middle East, some major shippers resumed passage through the Red Sea.
Analysts are of the view that the situation in the region, particularly events impacting key shipping routes and potential disruptions, can influence oil prices as it affects supply and transportation dynamics in the energy market.
Brent crude futures saw a marginal fall of 5 cents, representing a 0.1 percent decrease, and settled at $81.02 per barrel, while the US West Texas Intermediate (WTI) crude saw a slight decrease of 12 cents, or 0.2 percent, closing at $75.45 per barrel.
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The previous session saw both Brent crude and US WTI crude benchmarks registering gains of more than 2 percent. The market sentiment was influenced by concerns over potential shipping disruptions in the Red Sea due to further attacks on ships. Additionally, hopes of the US interest rate cuts in 2024, which could boost economic growth and raise fuel demand, contributed to the positive performance of oil prices in the previous session.
The ongoing Israeli military campaign in Gaza is identified as a significant factor impacting market sentiment. Israel's Chief of Staff Herzi Halevi has indicated that the conflict in Gaza is expected to extend over "many months".
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Emkay Wealth Management, the advisory arm of Emkay Global Financial Services, expects that Brent crude will show a range-bound pattern in the near term, with a potential for some decline.
Gold prices remained steady on December 27, with muted trading activity in the last week of the year. However, gold is on track to have its best year in three, with expectations that the Federal will slash interest rates in the first quarter of 2024.
Gold prices hold ground
Spot gold was down 0.1 percent at $2,064.79 per ounce, close to an over two-week high reached on December 22.
The government has allowed Indian banks to import gold from the United Arab Emirates (UAE) at concessional duty rates in a bid to facilitate gold imports. The move is in accordance with the free trade agreement (FTA) between India and the UAE, several media reports said, citing sources.
(With Reuters inputs)
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