Oil prices spike after US, UK airstrikes on Houthis in Yemen

Crude oil (CL=F, BZ=F) prices are jumping higher Friday after the US and UK military coordinated airstrikes on Iran-backed Houthi rebels in Yemen on Thursday. These events further complicate escalating conflicts in the Red Sea where Houthi forces are targeting freight shipping vessels.
Yahoo Finance Senior Reporters Ines Ferré and Jared Blikre detail the broader implications on global trade routes and the energy sector, while also commenting on energy M&A activity stemming from Chesapeake Energy Corporation’s (CHK) acquisition of Southwestern Energy Company (SWN).
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Well oil prices we mentioned them a moment ago they’re climbing higher this morning following us Le air strikes on Yemen’s houes we’ve got team coverage with Yahoo finances andz Fay and Jared blicker andz we begin with you you’re watching Brent this morning yeah that’s right and Brent touching $80 a barrel

This morning Brent has had a tough time going above $78 a barrel but look it’s not uncommon that we would see a spike of two or 3% in one day when we see these Red Sea tensions happening and we’ve seen it before oil has been range bound recently but it has been trading

Some days up 2% some days down 2% now with these strikes regarding these strikes we have seen that these tensions in the Red Sea are rising again and we are also seeing that there’s a major Danish oil tanker company torm they said that they’re stopping their routes via

The Red Sea why is this important well this company has about 80 vessels that move refined products from refineries to their customers so they will be stopping those routes via the Red Sea it’s important to note that this Red Sea connects to the Suez Canal it’s the shortest distance between Asia and

Europe M last week said that it was going to stop those routes for the foreseeable future they had temporarily stopped started again and now they have stopped again there’s another German giant also shipping giant that has said that it would not be going through the Red Sea now what this does is it

Lengthens their trips because they will have to go through the Cape of Africa it can lengthen the trip anywhere from 7 to 14 days so this is why we’re seeing oil prices Spike today nevertheless I will mention that we have seen some analysts that have lowered their forecast for

Brent crude for 2024 and that’s because of increasing Supply increasing Supply from the US and others you just had bares that lowered their forecast to $85 barrel for Brent for this year guys yeah thank you for that and I’ll take it from here I just want to talk about the oil

Patch in the United States and m&a has been the name of the game we saw a disastrous year last year not quite a disaster but it was not a good year for energy but we did see some deals announced later in the year we got Exxon potentially hooking up with Pioneer we

Got Chevron and hes uh ocidental and another private company um and we also have Chesapeake and Southwest now interesting combination and and I have some uh commentary from the street this really strengthens a play in the natural gas sphere and let me just read some of this analyst commentary here here’s

Mizuo uh they are upgrading the stock Chesapeake to a buy from neutral price Target 10496 this creates a US Shale gas Powerhouse with operational and marketing flexibility uh sees cost Savings of at least $400 million annually by 2025 and then here’s outperform with a price target of 85 the

Combination creates a must own dry gas producer when the market calls for growth to meet LG cause acid overlap significant and creates the leading dry gas footprint in two basins so let me just go back to the charts here uh I talked about the difficult year that we

Saw and let me just show you on a one-year trailing basis uh all the red you’re seeing on the screen it’s not a lot but look Chevron down 16% as it turns out Southwest is actually up a little bit 15% over that time period but here’s the 2-year look and this changes

Dramatically we saw oil really outperform it was the best performing section by far in 2022 and uh Exxon up 40% from that time period Chevron 16% ocidental petroleum 67 and Hess 55% so the name of the game is m&a for this year I think in the oil patch I wouldn’t

Be surprised to see a few more of these deals come about