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The
United States on Tuesday announced the creation of a
multinational operation to safeguard Red Sea commerce. The
United Kingdom, Bahrain, Canada, France, Italy, Netherlands,
Norway, Seychelles and Spain are among the nations involved.
Brent crude was up 9 cents at $78.04 a barrel by 1100 GMT. U.S.
West Texas Intermediate crude for January, which expires on
Tuesday, was down 1 cent at $72.46 while the more active
February contract lost only 2 cents.
Though the attacks on shipping have boosted the geopolitical
risk premium, "the actual effect on oil flows is likely to be
limited", said John Evans of oil broker PVM.
"The attacks have not hit anything that would interfere with
production," he said.
Crude had climbed nearly 2% on Monday, driven up by fears over
the disruptions to trade via the Suez Canal, through which about
12% of world shipping traffic passes.
Goldman Sachs analysts said the disruption is unlikely to have a
large effect on crude and liquefied natural gas (LNG) prices
because opportunities to reroute vessels suggest that production
should not be directly affected.
Oil major BP has temporarily halted transit through the Red Sea
and oil tanker group Frontline on Monday said its vessels would
avoid the route - signs that the crisis was broadening to
include energy shipments.
Also in focus this week will be the latest snapshot of U.S.
supplies. U.S. crude inventories are expected to decline by 2.2
million barrels, a Reuters poll showed.
The first of the week's two supply reports, from the American
Petroleum Institute, is due at 2130 GMT.
(Reporting by Alex LawlerAdditional reporting by Andrew Hayley
in Beijing and Stephanie Kelly in New YorkEditing by David
Goodman)
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