Brent Crude Falls to $104.74 as Saudi Supply Fears Ease
Brent crude futures dropped 1.03 percent to $104.74 a barrel on Thursday. US West Texas Intermediate futures declined 0.81 percent to $101.60. Prices retreated from weekly highs following signals of faster pipeline repairs in Saudi Arabia.
Brent crude futures fell US$1.09, or 1.03 per cent, to US$104.74 a barrel at 4:01 a.m. ET. US West Texas Intermediate futures dropped 83 US cents, or 0.81 per cent, to US$101.60 a barrel. Both contracts had lost approximately US$3 on Wednesday.
The decline followed reports that Saudi Arabia is offering additional crude cargoes to Asian refiners. These shipments move through ship-to-ship transfers off Oman’s Sohar port. This activity helps offset disruption caused by attacks on the East-West pipeline.
Pipeline repair signals reduce uncertainty
US Energy Secretary Chris Wright indicated a quicker return to service for the damaged infrastructure. He told CNBC that crude should flow through the pipeline within days. This statement helped lower the perceived risk of a prolonged supply cut.
Traders estimate that a long closure of the pipeline could remove up to 4 per cent of global oil supply. Saudi Arabia has not confirmed a specific date for full operational resumption. However, the market responded positively to the official timeline.
Regional conflict remains a key risk
Two pumping stations serving the East-West pipeline were damaged in an attack last week. Assessments from oil and security sources indicate the repair timeline remains unclear. Saudi warplanes struck Yemen while Houthi fighters launched drones and missiles at Saudi cities.
These actions followed a rapid advance that expanded Iranian influence in the region. The escalation adds a layer of geopolitical risk to the energy markets. Prices stayed above US$100 a barrel due to these ongoing tensions.
Diesel tightness outpaces crude concerns
European gasoil futures settled at a record high on Tuesday. US ultra-low sulfur diesel futures also reached a record high. Tightening diesel supplies have emerged as a significant pressure point for refiners.
A Ukrainian drone attack damaged a refinery in Yaroslavl, Russia. This incident further constrains fuel availability in the region. Goldman Sachs noted that refiners are prioritizing diesel production over gasoline in response to shortages.
