The Houthi attacks on shipping vessels has forced many tankers to avoid the corridor, seeking safer, but longer routes around the Cape of Good Hope in Southern Africa. Travelling a longer distance, often at a faster pace, is likely to add to fuel consumption and lessen/delay supplies. ‘Oil on the water’ surged by 85 million barrels in February, bringing the total to 1.9 billion barrels, as tankers are forced to re-route.
Brent has made a notable effort to break above the prior range of consolidation which formed mostly between $82 and $84. With the oil price above $85 a close on the daily chart above this level bodes well for a potential extension of the move.continue to make higher highs and higher lows since the December bottom. More recently, bulls will be encouraged by the bounce off the 200-day simple moving average as it acted as a springboard for the latest move.