This week, Houthi attacks on commercial shipping in response to US-led strikes against them are stoking concerns that escalation in the Red Sea could further disrupt supply. The Brent-Dubai price spread has risen nearly 200% this month as shippers have announced diversions from Red Sea transit.
Americas container markets are also volatile as carriers are re-routing vessels around the Cape of Good Hope, increasing operating costs and transit times. Freight for Ex-Asian cargo into North America has surged this month and could keep climbing if both Suez Canal transit difficulties and Panama Canal drought conditions continue.
Benzene is also seeing price strength from the shipping constraints, despite weak product demand. Prices have risen to their highest levels since October due to vessel delays and reduced imports.
The other major factor affecting US markets is the weather. Frigid temperatures and record demand have lifted NYMEX natural gas futures to a three-year high, and this week the US Energy Information Administration may be announcing the largest gas storage withdrawal on record, 370 Bcf or more.
Heavy ice has caused closures and delays throughout the Mississippi River transit system. The prompt-month Illinois Basin barge coal price is softening amid reduced transportation capacity.
US Gulf Coast refiners are also battling freezing conditions, with multiple outages reported. However, the recent build in gasoline and diesel stocks could cover near-term supply disruptions.
I’m Andre Mikhail. Thanks for kicking off your Monday with S&P Global Commodity Insights.