Brent crude oil price in Thursday's trading (September 26) reached $104.74 per barrel, indicating a decrease of $1.09 or 1.03% compared to the previous day. This price drop occurred amid reduced concerns about oil supply disruptions, although prices remain above $100 per barrel due to worries about escalating tensions in the Middle East.
Drop in WTI Oil Price
West Texas Intermediate (WTI) crude oil also traded down by 83 cents or 0.81% to $101.60 per barrel. The prices of both oil benchmarks had fallen by about $3 in Wednesday's trading (September 25).
Read more: Damage to the East-West pipeline in Saudi Arabia emphasizes the limitations of energy supply options
The decline in crude oil prices follows efforts to expedite the resumption of the East-West oil export pipeline in Saudi Arabia. Tim Waterer, senior market analyst at KCM Trade, pointed to reduced supply concerns stemming from Saudi Arabia's efforts to export oil shipments via alternative routes.
Impact of Pipeline Attack on Prices
Oil prices earlier this week reached their highest level in four months after shipping industry sources announced the suspension of crude oil loading from the Yanbu terminal in the Red Sea due to an attack on the East-West pipeline. Saudi Arabia has yet to specify when operations on this pipeline will resume. However, U.S. Energy Secretary Chris Wright stated that crude oil transfer through this pipeline is expected to resume within a few days.
Two pumping stations belonging to this pipeline were damaged in an attack last week, and the timeline for their repair is still unclear. Despite the drop in oil prices, concerns about escalating conflicts in the Middle East persist. DBS Bank of Singapore has indicated that its base scenario for oil price forecasting in the fourth quarter is a reduction in tensions between the U.S. and Iran, and accordingly, Brent crude is expected to stabilize in the range of $85 to $95.
Traders believe that a long-term halt of the East-West pipeline in Saudi Arabia could disrupt up to 4% of global oil supply. Additionally, reduced diesel supply has also put extra pressure on global markets, as disruptions in energy infrastructure in the Middle East and Russia have limited access to fuel.
Read more: Oil price drop after Saudi Arabia's action to improve supply · Brent crude oil price reached $104.24
