Oil prices fell for a third straight day Friday, ending a two-week rally that had lifted crude nearly 20%. Easing Saudi Arabian supply concerns and signs of diplomatic progress between the U.S. and Iran drove the pullback, pushing WTI below $100 a barrel for the first time since September 9.
Oil prices snapped a two-week winning streak that had pushed crude nearly 20% higher. Brent crude futures for November delivery fell 1.6% to settle at $103.19 a barrel. U.S. West Texas Intermediate crude for October dropped 2.3% to $99.53 a barrel. For the week, Brent shed 1.5% and WTI declined 0.7%.
Saudi Arabia moves to ease supply fears
Crude had surged earlier in the week after the shutdown of Saudi Arabia's East-West Pipeline, the kingdom's main alternative to shipping crude oil through the Strait of Hormuz. According to Reuters, up to 4% of global oil supply could be lost if the pipeline failed to restart within days. The pipeline was damaged amid an escalating conflict between Saudi Arabia and Iran-backed Houthi forces in Yemen, whose gains in the west of the country have given them added leverage over the Bab el-Mandeb Strait.
But markets found relief as Saudi Arabia signaled a faster recovery. Bloomberg News reported that the kingdom was seeking to restore about half the pipeline's capacity within days, compared with earlier reports it could take weeks. Riyadh also offered additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman's Sohar port, Reuters said. Saudi Arabia has also been ramping up exports from its east coast over the past couple of weeks, according to TankerTrackers.com.
Still, the shutdown carries real costs. Saudi Aramco told at least two European refining customers they will receive no crude oil next month, Bloomberg reported, adding that the decision affects all European buyers. European stock indexes slumped on the news.
Trump says Iran wants a deal
Away from Saudi Arabia, signs of diplomatic progress between Washington and Tehran added to the bearish mood. President Trump said this week "hopefully we're toward the end of the war," and described Iran as eager to reach an agreement.
Several media reports said the U.S. State Department granted visas to top Iranian officials, including the president and foreign minister, to attend next week's United Nations General Assembly. Chinese Foreign Minister Wang Yi called on Washington and Tehran to show restraint and reopen the Strait of Hormuz, while Iranian Foreign Minister Abbas Araghchi held talks with Chinese and Pakistani officials. China remains the largest buyer of Iranian oil.
Tensions have not disappeared. The U.S. and Iran remain at an impasse over the strait, even as a flare-up in military strikes appears to have quieted. Axios reported that Trump was nearing a decision on whether to resume large-scale action against Iran ahead of a planned meeting with Gulf leaders at the UN. Iran's Revolutionary Guard Corps Navy said Friday that a Togo-flagged tanker was struck attempting an unauthorized passage through the strait, according to Iranian state media.
Source: Commodities & Futures News
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