Oil futures: Crude prices spike as missile strikes oil tanker near Yemen
Quantum Commodity Intelligence – Crude oil futures were spiking higher late Friday on reports that an oil tanker had taken a direct hit from a Houthi missile after benchmarks had earlier consolidated the week's firm gains amid the increasing geopolitical 'risk premium' and a more optimistic outlook on the US economy.
Front-month Mar24 ICE Brent futures were trading at $83.72/b (2030 GMT), compared to the day's range of $81.31-$83.80/b and Thursday's settle of $82.43/b.
At the same time, Mar24 NYMEX WTI was trading at $78.14/b versus Thursday's settle of $77.30/b.
The late Friday surge came amid reports that an oil tanker came under attack off the coast of Yemen, with crude prices rallying over $2/b from the day's lows as the reports came through.
The vessel was named as the Marlin Luanda, chartered by Trafigura and reportedly carrying highly flammable naphtha. Late Friday, the commodities giant confirmed the vessel was on fire.
A spokesperson for Trafigura said: "Earlier on 26 January, the Marlin Luanda, a petroleum products tanker vessel operated on behalf of Trafigura, was struck by a missile as it transited the Red Sea.
"Firefighting equipment on board is being deployed to suppress and control the fire caused in one cargo tank on the starboard side."
Prices had already found support over the week as Houthi attacks continued against shipping in the Red Sea/Gulf of Aden, but markets rallied to 8-week highs on Thursday after US GDP for Q4 came in surprisingly strong.
"US economic data continues to point to an economy that's doing very well despite the various headwinds, including very high interest rates," said Craig Erlam, an analyst at brokerage Oanda.
"GDP data for the fourth quarter easily exceeded expectations, rising 3.3% on an annualized basis, adding to the increasing view that the US could be heading for a fairytale scenario, not just a soft landing," added Erlam, noting GDP forecasts had been around the 2% mark.
Weekly gain
Last Friday, Mar23 ICE Brent closed at $78.56/b, while WTI settled at $73.41/b for the Mar23 contract, leaving both benchmarks heading for gains of over 5.5%, although markets briefly dipped Friday after planned offshore North Sea strikes were called off.
Meanwhile, the Kuwait Oil Tanker Co. became the latest operator to suspend transit via the Red Sea, as at least two more missiles were fired from Houthi strongholds on Friday.
The market was also given a midweek lift after EIA data revealed US commercial crude inventories tumbled 9.2 million barrels last week as Arctic storms shut in production in North Dakota and, to a lesser extent, Texas.
However, traders will closely monitor data in the coming weeks, with the latest figure likely distorted by the disruptions to production and refining caused by the big freeze.
Oil markets were also buoyed after China announced a reduction in borrowing rates in a bid to boost the country's faltering economy.
In Europe, the ECB kept its interest rates unchanged for the third consecutive meeting, in line with expectations, but optimism remains for an April rate cut.
