Public Domain
Please Follow us on Truth Social, X , Youtube , Minds, Telegram, Rumble, GETTR, Gab, Instagram
Oil prices fell on Friday as Saudi Arabia restarted the East-West Pipeline and resumed tanker loadings at the Red Sea port of Yanbu, easing concerns over supply shortages that drove up prices in September.
The cut in oil prices of about 3% followed talks about releasing emergency fuel supplies, counting against shortage premium. Brent crude sank $2.83 or 2.8% on Friday to $99.48 a barrel by 8:42 a.m. GMT, after closing 2.8% lower at $102.31 on Thursday, the lowest close since Sept. 6. WTI dropped $3.35 or 3.6% to $89.52 a barrel in electronic trading on the New York Mercantile Exchange.
This marked the lowest close since Sept. 7 and also meant that both Brent and WTI crude were on track to post weekly declines after Brent jumped by more than $4 on Thursday. The decline in European gasoil was steeper, more than 5% to $1,377 a metric ton, as Saxo Bank’s Ole Hansen said the energy complex was being led lower by gasoil after talks about a possible release of stocks of diesel and crude by International Energy Agency members, as well as by individual European countries, eased concerns about acute tightness in the refined products market.
The talk came after US pressure on Germany and France to draw down their emergency diesel stocks. Washington asked the EU to release about 120 million barrels of diesel over six months or face a possible ban on US diesel exports, Reuters reported.
Thursday’s gain in the energy complex, with Brent crude settling at $102.31 a barrel and WTI at $92.87 a barrel, was undone on Friday after Chinese refiners suspended exports of diesel, gasoline and aviation turbine fuel for October outside of Hong Kong and Macau in a move seen by analysts as causing no supply pain, while the Wall Street Journal reported that a third U.S. aircraft carrier and up to 10,000 more troops were headed to the Middle East as President Trump weighed further military action against Iran. He had already authorized a military strike against Iran late on Sunday.
Even though there have been no shipping incidents in the Strait of Hormuz in the past week or so, the impact on Middle Eastern refined products exports remains, with diesel exports from the region running at about a quarter of pre-conflict levels while a ban on diesel exports by Russia is due to expire at the end of October. The stress in the energy market remains with refined products, not crude.
