The on-going war between Israel and Palestine has gone beyond land borders, as attacks are now carried out on the sea. A lot of shipping companies have temporarily stopped operations in order to reduced losses. Attacks by the Yemen’s Houthi rebels on ships in the area since November have impacted companies and alarmed major powers, in an escalation of Israel’s more than three-month war with Hamas militants in Gaza. The group says it is acting in solidarity with Palestinians.
About 12% of world shipping traffic transits the Suez Canal via the Red Sea. According to reports, vessels supplying liquefied natural gas (LNG) from Qatar are among the many ships forced to sail around Africa via the Cape of Good Hope. This diversion can add about nine days to the normally 18-day trip from Qatar to northwest Europe. The value of the items transported will be increased as a result of the diversion. This could eventually lead to higher inflation if the attacks are not curtailed.
The opening price of WTI Oil price in 2024 was $72.17. On the second trading day of the year, the price of oil fell to $69.33 per barrel making it the lowest price this year. A bounce has occurred as the current price of oil is at $72.87. Since the high in October at $94.78, the price of crude oil has been falling. We might be seeing scarcity of oil in some places across the world. The price of oil could further drop to $68.67 in the coming days but that could just be a precursor to a bounce that will eventually lead to the increase in the price of crude oil in the long run.
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