Oil prices fell in early trade on Thursday, extending the losses recorded the day before. Brent crude futures slipped $1.24, or 1.2%, to $104.59 a barrel, while U.S. West Texas Intermediate futures dropped $1.14, or 1.1%, to $101.29.
Saudi Arabia’s extra cargoes calm market nerves
Analysts said the decline was driven by news that Saudi Arabia will ship additional crude to Asian refiners through ship‑to‑ship transfers off Oman’s Sohar port. “Concerns over supply tightness eased slightly following news that Saudi Arabia would ship cargo via Oman,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
Kikukawa added that expectations of progress toward easing tensions in the Middle East ahead of next week’s U.S.–China summit are also limiting further price gains.
Background on recent supply shocks
Earlier this week, oil prices had risen to four‑month highs after reports that Saudi Arabia’s Red Sea export hub at Yanbu had suspended crude loadings and that Riyadh had cancelled some cargo deliveries to European customers. Those disruptions followed attacks on the East‑West pipeline, a key conduit that moves oil from the interior of Saudi Arabia to the Red Sea port.
Two pumping stations on the pipeline were damaged in a recent strike, and repair timelines remain unclear, according to three oil and security sources.
Regional conflict adds uncertainty
While the price dip offers short‑term relief, broader concerns about the ongoing Middle East war persist. Saudi warplanes continue to target positions in Yemen, and Houthi fighters have launched drones and missiles at Saudi cities, according to statements from the Iran‑backed movement.
U.S. inventory data supports price moderation
On the supply side, the U.S. Energy Information Administration reported a smaller‑than‑expected draw from domestic crude inventories last week. Crude stocks fell about 640,000 barrels, well below the 1.62 million‑barrel draw that analysts had forecast.
These inventory figures, combined with the Saudi cargo announcement, helped curb the bullish momentum that had pushed oil higher earlier in the week.
Outlook
Market participants will watch closely for further developments on the pipeline repairs, the pace of Saudi extra shipments, and any escalation in regional hostilities. The combination of supply‑side adjustments and geopolitical risk continues to shape oil price dynamics.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
