Crude Oil Prices Drop Below $104 for Third Straight Session

Brent crude futures fell $1.01 to $103.70 per barrel on September 18. US West Texas Intermediate futures dropped $0.94 to $101.00. This marked the third consecutive session of price declines. Traders remained calm despite new threats to regional supply chains.

Saudi Arabia and Yemen-based Houthis exchanged strikes on Thursday. The conflict widened its regional footprint during the trading day. Oil prices had reached four-month highs earlier in the week. Those gains reversed as markets assessed the current supply situation.

Pipeline damage affects supply estimates

Satellite imagery revealed damage to three pumping stations. One station was identified as damaged for the first time. The East-West pipeline serves the Yanbu Red Sea export hub. Loadings at this critical facility were suspended last week.

A prolonged shutdown could cut 4% of global oil supply. Saudi Arabia aims to restore half of the pipeline capacity soon. US Energy Secretary Chris Wright expects crude flow to resume within days. Riyadh is offering additional cargoes via ship-to-ship transfers off Oman.

Banks see mixed price scenarios

JPMorgan stated it lacks a clear baseline view for oil markets. This is the first time since the US-Israeli war on Iran began. Daan Struyven of Goldman Sachs noted shipping disruptions are spreading. He sees meaningful upside potential for crude prices.

Goldman Sachs outlined a scenario where prices reach $120 per barrel. This assumes intensified attacks on vessels in the Middle East. If exports normalize, the bank expects prices to fall toward $80. Citi raised its Q3 Brent average forecast to $86 from $80.

Analysts adjust short-term forecasts

ANZ analysts lifted their short-term Brent forecast to $95. They warned prices could rise if the conflict escalates further. A prolonged standoff between the US and Iran appears likely. This scenario could delay the return of full Middle Eastern supply.

Citi cited a longer timeline for reopening the Strait of Hormuz. ANZ noted calibrated military action by the US and Iran. These factors drive the recent adjustments in price targets. Market participants continue to monitor shipping risks closely.