WTI hovers below $73.00 with positive sentiment as Houthi attacks commercial vessels

• WTI price gained ground on a threat of trade and supply disruption.
• Houthi militant group attacked a Norwegian commercial vessel in the Red Sea.
• US Defense Secretary Lloyd Austin to have virtual talks with other defense ministers to address the Houthi threat.

West Texas Intermediate (WTI) price grapples to extend its gains on the second successive day, hovering around $72.80 per barrel in the Asian hours on Tuesday. Crude oil prices receive support due to geopolitical disruptions affecting trade and supply costs, following an attack by the Houthi militant group on commercial vessels near Yemen.

On Monday, a Norwegian commercial vessel was targeted in the Red Sea, prompting oil major British Petroleum to halt all transit through the waterway temporarily. The leading shipping firms to contemplate avoiding the Suez Canal.

Defense Secretary of the United States (US), Lloyd Austin declared that Washington is forming a coalition with defense ministers from the region. They are set to participate in virtual talks on Tuesday to address the Houthi threat.

Furthermore, the extended cuts of 50,000 barrels per day (bpd) from Russia have played a role in supporting and bolstering Crude oil prices. In addition, United States officials revealed on Monday their efforts to urge shippers to provide more information about their dealings with Russian oil, aiming to strengthen the enforcement of sanctions.

Canadian refiner Imperial Oil has projected upstream production for 2024 to be between 420,000 and 442,000 barrels per day (bpd), surpassing its 2023 guidance. Meanwhile, the Canadian Association of Energy Contractors anticipates an 8% increase in well-drilling activities in 2024. This development may exert downward pressure on WTI prices.

On Friday, the data revealed a decrease in Baker Hughes Rig Counts to 501 from the previous figure of 503. This suggests a minor decline in the oil service industry’s consumption of products and services. Additionally, the API Weekly Crude Oil Stock and EIA Crude Oil Stocks Change for the week ending on December 15 are scheduled for publication on Tuesday and Wednesday, respectively.