Houthi Rebels Continue Attacks on Red Sea Ships
January 16, 2024
The Middle East remains the main focus of the energy markets and the driver of prices. The Houthi rebels have continued their attacks on shipping in the Red Sea even after US and UK attacks on their infrastructure. Despite all the activities in the Middle East so far, thankfully there has been no direct impact on the oil supply. Concerns about global oil demand also continues to be a factor that traders are watching. The demand factors have been hard to gauge as there are varying outlooks, opinions, and data. Global consumption of petroleum and liquids hit a record 101.1 million barrels per day in 2023, surpassing pre-pandemic levels. The US Energy Information Administration (EIA) forecast further increased to 102.15 million bpd in 2024 and 103.7 million bpd in 2025.
One possible support to demand is that China is again considering some stimulus for their economy. They are considering 1 trillion yuan ($139 billion dollars) of new debt issuance under a so-called special sovereign bond plan, as they seek to shore up the world’s second-largest economy.
From Reuters. Chinese refiners are actively booking crude oil cargoes for delivery in March and April to replenish stocks, locking in relatively low prices and in anticipation of stronger demand in the second half of 2024. “There will be stock-building sprees over the Q1-Q2, in preparation for the summer,” said Kipler analysts Viktor Katona, repeating a trend seen by Chinese refineries in 2023.