Oil prices were steady on Tuesday after recovering earlier losses, as the market weighed increases in Middle Eastern crude exports and a planned Group of Seven release of emergency diesel and crude stockpiles against supply concerns related to attacks by the Iran-backed Houthis in Yemen.
Brent futures were down 29 cents, or 0.3%, at $100.03 a barrel at 12:33 p.m. EDT (1633 GMT), while US West Texas Intermediate (WTI) crude rose 16 cents, or 0.2%, to $89.59.
That put Brent on track for its lowest close since September 22.
“The price of the global crude benchmark, Brent, is once again toiling around $100/barrel, as its reasons for trading much beyond the psychological 3-digit mark are being eroded … for now the assumption of more crude getting through has dampened price fervour,” said John Evans, an analyst at oil broker PVM.
Around 12 million barrels per day of crude oil and 2 million bpd of refined products — volumes needed to dampen price pressure — have left the Middle East on tankers in the last seven to 10 days, the CEO of commodity trading giant Vitol said on Tuesday.
Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that oil pumped through the East-West Pipeline, which runs to the kingdom’s Red Sea export hub of Yanbu, had reached 5.8 million barrels as of Tuesday morning.
Oil price declines, however, have been limited by the possibility of further Middle East supply disruptions.
Saudi Arabia’s airports in Jazan and Najran were targeted in two attacks on Monday evening, injuring three people and causing limited damage, the Saudi aviation authority said, as hostilities between the kingdom and Yemen’s Iran-backed Houthis escalated.
The attacks occurred as Saudi-backed Yemeni government forces pressed a major offensive to retake territory from the Houthis, after weeks of rebel advances, with Riyadh stepping up airstrikes in support of the campaign.
Separately, the Saudi-led coalition said it intercepted and destroyed a ballistic missile launched by the Houthis.
Oil stocks around the world
The International Energy Agency will meet next week to work out the details of a diesel stock release as market confusion grows over how many barrels Europe and the US plan to make available to address shortages and record-high prices, sources said.
The surge in diesel prices has turned the fuel, which underpins trucking, agriculture and industry, into a global political and economic concern. The wars in Iran and Ukraine have curtailed exports and damaged refineries, helping drive the rise in prices.
Under pressure from US President Donald Trump, the Group of
Seven major economies agreed on Friday to release 100 million
barrels of diesel and crude oil from emergency reserves and
pledged to refrain from imposing energy export restrictions.
The G7, however, did not provide a breakdown of the volumes
of crude, diesel and other products to be released, or say which
countries would participate.
With the war in Iran disrupting the flow of Middle East oil
supplies, the US Energy Information Administration (EIA)
projected on Tuesday that world petroleum production would drop
from a record 106.3 million bpd in 2025 to 101.1 million bpd in
2026, and world oil demand will drop from a record 104.4 million
bpd in 2025 to 102.4 million bpd in 2026.
In 2027, however, EIA projected world oil supply and demand
would rise back to record highs of 109.6 million bpd of
production and 104.6 million bpd of consumption.
In the US, meanwhile, the oil market was watching for weekly
storage reports from the American Petroleum Institute trade
group on Tuesday and the EIA on Wednesday.
Analysts estimated energy firms added 1.8 million barrels of
crude to US storage during the week ended October 2.
If correct, it would mark the first time since August that
crude stocks increased for three weeks in a row and compare with
an increase of 3.7 million barrels in the same week last year
and an average increase of 1.7 million barrels over the past
five years (2021 to 2025).
Source: Khaleej Times