Oil prices faced a significant decline on Wednesday, with Brent crude dropping by 93 cents to reach $107.82, and West Texas Intermediate falling by 97 cents to $104.86. This price drop occurred as investors assessed the risk of oil supply following the suspension of oil loading at the Yanbu port in Saudi Arabia.
Increase in U.S. Crude Oil Reserves
According to data from the American Petroleum Institute, crude oil, gasoline, and distillate fuel reserves in the country increased last week. Crude oil reserves rose by 7.1 million barrels in the week ending September 10, while analysts in a Reuters poll had predicted that these reserves would decrease by only about 1.6 million barrels.
Read more: Increase in LNG Prices is Raising the Freight Rates of Clean Tankers Using LNG
Impact of Loading Suspension at Yanbu Port
The suspension of oil loading at the Yanbu port in Saudi Arabia, following the closure of the East-West pipeline due to Houthi attacks, has raised new concerns in the oil market. Sources reported on Tuesday that oil loading at this port has been halted, and this situation could have serious implications for oil supply in the global market.
The U.S. Energy Secretary stated that oil flow should resume within a few days. However, sources speaking to Reuters provided varying estimates regarding the timeline for pipeline repairs. One source indicated that repairs could take five to six weeks, while another source stated that the pipeline could resume pumping sooner and partially.
The unexpected increase in gasoline and diesel reserves has also put pressure on prices and affected the global crude oil market conditions. While crude oil reserves are increasing, analysts believe that the fundamental tightness of the global oil market may not change.
Read more: U.S. Energy Secretary: The East-West Pipeline in Saudi Arabia Will Be Active Soon · Crude Oil Prices Drop Following Unexpected Increase in Storage in the U.S.
