Oil prices declined on Tuesday as investors focused on signs of recovering crude exports from the region and lingering concern over Middle East supply disruption brought about by the US-Israeli war on Iran.
Brent crude futures were down 54 cents, or 0.51%, at $104.74 a barrel at 1144 GMT. Meanwhile, US West Texas Intermediate crude was at $91.83, down 77 cents, or 0.83%.
Brent and WTI are headed for monthly gains of around 16% and 7%, respectively.
“A clearer picture is emerging of higher oil export volumes leaving the Gulf, but much of that increase still relies on workarounds such as ship-to-ship transfers,” said KCM Trade chief analyst Tim Waterer.
“Those methods are less efficient and more costly than
normal operations, which is why crude prices remain elevated.”
Saudi Arabia has resumed oil loadings from its Red Sea port
of Yanbu after restarting operations on the East-West Pipeline,
according to trade sources and shipping data, improving the
outlook for oil exports from the Middle East.
Crude exports from major Middle Eastern producers climbed to
12.8 million barrels a day in September, the highest since
February, preliminary figures from data provider Kpler showed on
Monday, helped by increased shipments from Saudi Arabia and the
United Arab Emirates.
Diesel futures in Europe edged down on Tuesday to trade
around $1,370 per metric ton, having reached as high as $1,535
per ton last week as US President Donald Trump had said he
supported a ban on diesel exports. European diesel futures have
more than doubled so far this year.
US and Iranian officials spoke separately with mediators in
a renewed effort to end seven months of war, officials of both
countries said.
But Trump said he has offered Iran nothing to end the war,
rejecting media reports that cited US officials saying he was
willing to ease sanctions and release frozen funds for
“concrete” steps regarding Iran’s nuclear programme.
Meanwhile, the US is considering regulatory relief to allow
broader sales of red-dyed diesel to help lower prices, people
familiar with discussions told Reuters. The proposal emerged as
a leading alternative to a diesel export ban.
“The flashes (of a possible rapprochement between the US and
Iran) across media are wishful thinking rather than concrete
deals,” said PVM analyst John Evans.
“If it were not so, why is the US president still pondering
a diesel/export ban and twiddling with the tax regime on
agricultural ‘red’ diesel if he thought petroleum products would
be soon flowing forth from the choke points of disruption he has
caused via Hormuz and Bab el-Mandeb?”
US crude oil and gasoline inventories were expected to have
fallen last week, while distillate stockpiles were likely
unchanged, a preliminary Reuters poll showed on Monday.
(Additional reporting by Enes Tunagur in London, Sumit Saha
in Bengaluru and Trixie Yap in Singapore; Editing by Louise
Heavens and Jan Harvey)
Source: Khaleej Times