Oil prices traded sideways on Friday and are on track to end the week above $100 per barrel for the first time in nearly four months. This price increase is due to concerns about oil supply disruptions from the Middle East and the capture of the port city of Mocha by Houthi rebels on the Red Sea coast.
Oil Price Volatility
Brent, the benchmark that tracks two-thirds of the world's oil, fell to $105 per barrel at 11:16 AM UAE time. Additionally, the West Texas Intermediate index, which tracks U.S. crude oil, saw a 1.96% decrease at $100.5. Oil prices saw a slight increase early in the morning after reaching $109 per barrel in the previous session, but declined later in the day.
Analysts believe that the advance of Houthi forces towards coastal areas near the strategic Bab al-Mandab Strait, including pressure towards Mocha, has raised further concerns about disruptions in maritime transport in the Red Sea. These developments have intensified existing pressures on oil supply in the Gulf and forced some Saudi energy facilities to halt operations.
Decrease in Maritime Traffic
According to preliminary data, maritime traffic in the Bab al-Mandab Strait decreased on Thursday, with only 27 ships passing through this critical point, down from 32 ships the day before. Of the total ships, 16 left the Red Sea while 11 entered. Additionally, maritime traffic in the Strait of Hormuz has remained thin.
Analysts believe that the main question for oil markets is no longer whether Brent can break above $100, but whether the market can stabilize below $120. This situation has put more pressure on the oil market and could push prices to new levels.
