The price of North Sea Brent crude oil reached $103.94 per barrel in trading on Friday (September 27), a decrease of 88 cents or 0.84%. These changes followed a reduction in concerns about supply disruptions from Saudi Arabia.
Decline in oil prices and influencing factors
Meanwhile, the U.S. benchmark West Texas Intermediate crude traded slightly lower at $102.15 per barrel. The price of Brent crude is on track to record its first weekly decline in three weeks, having decreased by a total of 0.8%.
Read more: Oil price drop due to improved supply situation and diplomatic efforts
Analysts and market outlook
Thomas Varga, an analyst at PVM Oil Associates, noted that concerns about supply shortages have diminished due to various reasons, including increased loading of crude oil from Saudi Arabia via alternative routes, rising petroleum product inventories in the U.S., Singapore, and Europe, and increased fuel exports from China.
Varga added: "The current outlook for fundamental factors in the market does not justify a long-term decline in Brent prices below $100 per barrel."
Impact of supply disruptions and exports
Global crude oil prices had approached their highest level in four months earlier in the week; this increase followed reports of a halt in crude oil loading at the Yanbu export terminal in Saudi Arabia and the cancellation of several shipments to Europe due to an attack on the East-to-West pipeline. However, prices were adjusted after reports emerged about Saudi Arabia's efforts to restore about half of the capacity of the East-to-West export pipeline in the coming days.
There are varying estimates regarding the time required to resume operations of the East-to-West export pipeline and restore crude oil flow to normal levels.
Increase in China's exports and global inventories
Chinese customs data shows that the country's petroleum product exports in August increased by 12.7% compared to the previous year, with jet fuel exports reaching unprecedented levels. It is also expected that China will continue to gradually ease export restrictions in September of this year.
According to Morgan Stanley data, petroleum product inventories increased by 3.7 million barrels last week, due to growth in inventories in Western regions and Singapore.
Read more: DNO ASA changed its acquisition proposal for Capricorn Energy to a cash offer · Decrease of 600,000 barrels in crude oil reserves in the United States
