Brent Crude Price Slips Below $100 Amid Ongoing Supply Chain Disruptions
The Brent crude price slipped below $100 a barrel on Friday but still managed to post a significant weekly gain. According to Invezz, the market is repricing physical risk rather than just reacting to headlines.
The price of Brent futures fell by 0.7% to $99.97 in early Asian trading, while US West Texas Intermediate eased to $91.49. However, the weekly move was still a huge 13.5%, indicating that supply-loss probability is rising.
This uptick in prices reflects the market's concern over overlapping disruptions in the global oil supply chain. The attacks on two tankers carrying Saudi crude in the Red Sea have intensified concerns over the Bab el-Mandeb Strait, adding to existing restrictions at the Hormuz chokepoint.
The situation is further complicated by Kazakhstan's reduced production after the Caspian Pipeline Consortium halted loadings at its Black Sea terminal due to suspected Ukrainian drone attacks. This has resulted in a real barrel loss on top of Middle East route risk, tightening global supply further and supporting a wider backwardation/strength in prompt differentials.