The Houthis expand control of the Red Sea side of Yemen, threatening remaining Saudi oil exports — and yet prices fall.

Source: Bloomberg.

One explanation might be news regarding demand destruction, as reported  by the International Energy Agency. From Bloomberg:

The agency said the hit to 2026 oil demand looks set to be on a comparable scale to the four largest shocks of the last 60 years, with the biggest impact falling on middle distillates like diesel, and feedstocks for petrochemicals plants in Asia.

…

… the market is heading for a deeper supply shortfall than previously estimated because the war is having an even bigger impact on the flow of oil than on consumption, according to the IEA.

The agency’s latest data indicate an average global oil deficit of about 1.7 million barrels a day this year, compared with a shortfall of 1.3 million a day in last month’s report. It shows stockpiles continuing to draw in the fourth quarter, instead of a marginal increase that it previously forecast. The agency’s August report said the market would return to surplus toward the end of this year.

Not a definitive answer, but a possible resolution to the puzzle. As the extent of the closure becomes clearer, perhaps we’ll see a revision to prices.