Brent futures market closed today, transit concerns through Red Sea intensifies

The ICE Brent Futures market is closed for trading today on account of the New Year holiday. Front-month ICE Brent closed at $77.04/bbl on Friday, which is $0.67/bbl lower than the price was at 09.00 GMT on Friday.

PHOTO: An oil refinery behind a pumpjack. Getty Images

Here's a recap of what factors could drive prices.

Upward pressure:

The latest attacks by the Houthis in the Red Sea have again sparked concerns about shipping in the region, and could potentially drive Brent prices higher.

On Saturday, another container vessel owned by A.P. Moller-Maersk was attacked by Houthi militants. The incident prompted the Danish shipping firm to suspend all operations in the Red Sea and the Gulf of Aden for 48 hours until 2 January.

“[Oil market] experts caution that any escalation in global instability could lead to a rise in oil prices,” said SPI Asset Management’s managing partner Stephen Innes.

The Yemen-based militant group has been targeting commercial vessels in the Red Sea since November 2023, in response to Israel's rejection of a ceasefire in Gaza. As a result, many shipping companies have had to reroute their vessels, choosing a longer and costlier journey via the Cape of Good Hope.

Downward pressure:

The impending demand crisis in China, one of the biggest crude oil importers, is exerting downward pressure on Brent futures.

China's factory activity in December declined, “with the manufacturing PMI dropping to 49.0 from 49.4 in November,” Innes said. This contraction is not because of a lack of capital, but rather a weak demand, he further commented.

“China requires more than just stimulating economic activity—it necessitates fundamental reform of the underlying growth engine,” Innes added.

By Aparupa Mazumder

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