Brent steady amid heightened geopolitical risks

The front-month ICE Brent contract has inched $0.13/bbl up on the day, to trade at $80.23/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Brent futures have managed to hold above the $80/bbl mark this week, propped up by the Red Sea crisis and disruptions to global commodity shipping.

Oil traders are keeping a “close eye on the geopolitical risk premium, providing support for oil [Brent] prices,” said SPI Asset Management’s managing partner Stephen Innes.

About 12% of global oil shipments go through the Red Sea, according to the US Energy Information Administration (EIA).

Downward pressure:

Brent futures came under some downward pressure after Angola withdrew from OPEC. This move has sparked questions about the group’s ability to control oil output with a concensus.

“News today that Angola is leaving OPEC is raising concerns that there might be growing pressure within the OPEC cartel to raise production,” said Price Futures Group’s senior market analyst Phil Flynn.

Angola's oil minister Diamantino Azevedo said OPEC and its allies, known as OPEC+, does not serve Angola’s interests, Reuters reports.

“Today the concern is that Angola’s departure might signal some underlying tension with the fact that the cartel is losing market share to non-OPEC producers and mainly the United States,” Flynn adds.

By Aparupa Mazumder

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