Brent sheds as shipping major considers to resume voyages through Red Sea

The front-month ICE Brent contract moved $0.97/bbl lower on the day from Friday, to trade at $79.26/bbl at 09.00 GMT.

PHOTO: Oil pump jacks. Getty Images

Trading activity is expected to be muted today as some markets are still closed due to the Boxing Day holiday.  

Upward pressure:

Brent futures gained some support after Congo reiterated its commitment to the Organization of the Petroleum Exporting Countries (OPEC) and its allies, following Angola's departure from the organisation.

"The Republic of Congo reaffirms its steadfast commitment to the strategic policy defined by the Secretary-General of OPEC and OPEC+," Congo's hydrocarbons minister Bruno Jean-Richard Itoua said. The country is “committed to continuing close and constructive collaboration with all member countries,” he further added.

Nigerian energy minister Heineken Lokpobiri also reaffirmed the country’s commitment to OPEC. “We are resolute in our dedication to OPEC’s objectives while actively engaging with the organisation to address concerns that resonate not only within our nation’s borders but across the entire continent,” he said.  

Downward pressure:

Meanwhile, Danish shipping company A. P. Moller-Maersk on Sunday announced that it is preparing to resume shipping operations in the Red Sea and the Gulf of Aden trade route. This announcement has helped alleviate supply concerns in the area and capped Brent's price gains, analysts said.

Oil’s gains “faded after oil traders digested news that A.P. Moller-Maersk A/S had announced its readiness to resume shipping operations through the Red Sea,” said SPI Asset Management’s managing partner Stephen Innes.

The establishment of a US-led maritime task force to safeguard the Red Sea region for shipping facilitated Maersk's decision to resume commercial operations in the Bab al-Mandab Strait.

By Aparupa Mazumder

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