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Oil: Steady after biggest weekly gain since October

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Brent was trading above $79 a barrel after rising more than 3% last week, its biggest gain since October.

Πετρελαιο: Στα&theta ;εροποιεΙται μετα τη μεγαλyτερη εβδομαδιαliα ;ο

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Oil steadied after its biggest weekly rise in more than two months, with shipping problems in the Red Sea taking center stage after a series of Houthi attacks on ships in the vital important sea route.

The ships were forced to change course after the attacks, resulting in the formation of a multinational naval strike group to help protect merchant ships. Container giant A.P. Moller-Maersk A/S now says it is preparing to resume using the route, which connects to the Suez Canal.

Brent was trading above $79 a barrel after rising more than 3% last week, the biggest rise since October. West Texas Intermediate was below $74.

Πετρελαιο: Στα&theta ;εροποιεΙται μετα τη μεγαλyτερη εβδομαδιαliα ;ο

“Energy supply chains are facing another cycle of turmoil as attacks in the Red Sea will have ripple effects,” according to analysts at S&P Global Market Intelligence. “Alternative routes create either practical or financial problems,” with crossings via the Cape of Good Hope adding at least 10 days to travel times and the Panama Canal facing water shortages.

Recent gains in crude have helped limit the quarterly decline, as oil remains on track for losses of about 8% this year. Traders worry that despite pledges to further cut output from the Organization of the Petroleum Exporting Countries and its allies, global crude supply could outstrip demand next year. Angola pulled out of the producer group on Friday amid disagreements over quotas, but other members were quick to reaffirm the cartel's unity.

Time margins have been tightened in recent meetings. Among them, the Brent prompt spread – the difference between its two closest contracts – has swung to 31 cents a barrel in backwardation, a bullish short-term pricing pattern, versus 16 cents a barrel in the opposite contango structure a week ago.

February Brent rose 0.2% to $79.19 a barrel at 15:18 Singapore (09:18 Greek time), while February WTI rose 0.1% to $73.64 the barrel.

It is noted that the week between the Christmas and New Year holidays is likely to see a lack of liquidity, with combined total open interest in the main oil contracts following a lower course than around the middle of the month. Oil's implied volatility has also declined in recent weeks.

With information from Bloomberg

Source: www.kathimerini.com.cy

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