Oil falls on supply concerns

Oil fell after three days of gains on concerns about rising U.S. production amid the ongoing threat of attacks on ships in one of the world’s most vital waterways. Global benchmark Brent futures fell to around $79 a barrel, while U.S. crude was below $74. Government data on Wednesday showed U.S. crude production hit a new record 13.3 million barrels a day last week. Meanwhile, the Iran-backed militant group has warned it will retaliate if the U.S. launches military strikes on its bases. Crude has rebounded this week as more Red Sea attacks prompted carriers to divert ships away from the key energy chokepoint. Investors are still facing their first annual decline since 2020 as OPEC+ remains unconvinced that it can tighten the market in the coming quarter despite the group’s decision to extend supply curbs. That comes as production outside the cartel picks up, including the United States, Guyana and Brazil. “This is a market where there is a lot of tension, especially supply tensions,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank. While the US is considering military action against the Houthis, Washington prefers a diplomatic solution and is working with Western and Arab allies to support a maritime protection force. Almost 12% of global trade passes through the Red Sea, and more than 100 container ships are currently taking the long route around Africa due to fears of attack.