Crude prices rise amid shipping delays and supply concerns

27 Feb 2024 , 10:34 AM

As supply concerns were stoked by shipping interruptions, oil prices increased slightly in early Asian trading on Monday, maintaining gains for the third day in a row. 

U.S. West Texas Intermediate (WTI) crude futures increased by 15 cents, or 0.2%, to $77.73 a barrel, while Brent crude futures increased by 16 cents, or 0.2%, to $82.69 a barrel.

On Monday, both benchmarks had settled more than 1% higher.

Houthis affiliated with Iran have persisted in their attacks on ships in the Red Sea, and although the Israel-Hamas conflict hasn’t had a major impact on the availability of oil, it has raised freight costs and lengthened shipment times, resulting in barrels remaining in the water for longer.

As the parties to the Israel-Hamas conflict in Gaza appeared to be drawing closer to a settlement during talks in Qatar that also sought to mediate the release of captives, U.S. President Joe Biden stated on Monday that he hoped to have a truce in place by next Monday. 

Both Israel and Hamas continued to publicly hold diametrically opposed views on a potential ceasefire and blame one another for any delays.

In the meantime, Jeffrey Schmid, the president of the Kansas City Federal Reserve Bank, indicated on Monday at his first policy speech that he, like the majority of his colleagues in central banking, is not in a rush to lower interest rates. High borrowing rates usually mean lower oil demand and slower economic growth. 

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