NEW YORK (Reuters/Web Desk) – Oil prices were down for the second day in row on Thursday, as Brent was being traded for $78.61 per barrel after a 1.31pc decline, while WTI was down 1.43pc and available for $73.05 by 3:42pm PST [10:42GMT].
The latest losses come after oil dropped nearly 2 per cent on Wednesday, eating into the previous day's gains as investors monitored developments in the Red Sea, where shippers are returning despite further attacks a day earlier.
Brent crude futures had settled down $1.42, or 1.8pc, at $79.65 a barrel. US West Texas Intermediate crude was recorded at $1.46, or 1.9pc, to $74.11.
Danish shipping company Maersk said it has scheduled several dozen container vessels to travel via the Suez Canal and Red Sea in the coming weeks after calling a temporary halt to those routes this month following attacks by Yemen's Iran-backed Houthi militia.
However, a US-led coalition to quell tensions in the Red Sea has not so far yielded coordinated action as hoped.
A week after the launch of the US-led maritime force, many allies do not want to be associated with it, partly reflecting the fissures created by the conflict in Gaza, which has seen the US maintain firm support for Israel even as international criticism rises over its offensive.
The prospect of a prolonged Israeli military campaign in Gaza and the spill over of the conflict to attacks on ships in the Red Sea remain major drivers of market sentiment.
Israeli forces pummelled central Gaza by land, sea and air on Wednesday, a day after Israel's chief of staff, Herzi Halevi, told reporters the war would go on "for many months".
US government data on fuel stockpiles is due later in the day [Thursday], delayed by a day due to the Christmas holiday on Monday.
Data from the American Petroleum Institute industry group on Wednesday showed crude stocks rose 1.84 million barrels in the week ended Dec 22, against estimates from seven analysts polled by Reuters for a drop of 2.7 million barrels.
Meanwhile, the growing prospect of interest rate cuts in Europe and the US in 2024 are positive from an oil demand perspective.
"The market is likely to try the upside again ... maybe in the early new year, also on expectations of a recovery in fuel demand thanks to monetary easing in the United States and higher kerosene demand during the winter in the northern hemisphere," said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.