Global crude oil prices fell by about 2 per cent on Thursday, with Brent crude dropping to $103.13 per barrel as concerns over potential disruptions to Middle East oil supplies eased. Brent futures declined by $2.67, or 2.5 per cent, from Wednesday’s close of $105, while US West Texas Intermediate crude fell $1.61, or 1.6 per cent, to $100.82 per barrel.
The latest decline comes after Brent crude climbed as high as $109 earlier in the week, pushing energy-market concerns higher and contributing to a petrol price increase at the Dangote Petroleum Refinery. The market has since responded to signs that additional crude supplies could help cushion the impact of recent disruptions in Saudi Arabia.
According to Reuters, Saudi Arabia has been offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman’s Sohar port. The move is expected to partly offset disruptions caused by attacks on the country’s East-West oil pipeline, which transports crude to the Red Sea export terminal at Yanbu.
Saudi Arabia is also reportedly working to restore about half of the pipeline’s capacity within days. The pipeline was damaged in attacks last week, affecting three pumping stations. While traders had earlier warned that a prolonged shutdown could disrupt as much as four per cent of global oil supply, reports of possible repairs have helped reduce some of the market’s immediate supply concerns.
Oil prices had surged to around four-month highs after reports that crude loadings at Yanbu were suspended and some cargo deliveries to European customers were cancelled. However, with Saudi Arabia exploring alternative supply routes and working to restore pipeline operations, attention is now shifting back to how quickly disrupted production and exports can normalise.
source: punch