Oil prices extend losses as fears of Middle East supply disruptions ease

Oil prices continued their downward trend on Thursday, further declining from the previous day's losses as reports emerged that Saudi Arabia was supplying additional crude through Oman, alleviating concerns about Middle Eastern supply disruptions. Brent crude futures slipped $1.24, or 1.2%, to $104.59 a barrel by 0049 GMT, while U.S. West Texas Intermediate futures dropped $1.14, or 1.1%, to $101.29.

These were also down about $3 from the previous trading day. Hiroyuki Kikukawa, chief strategist at Nissan Securities, noted that the news of Saudi Arabia's additional shipments through Oman had eased some of the supply tightness fears. He also added that expectations of reduced tensions in the Middle East ahead of the upcoming U.S.-China summit were curbing further price gains.

Earlier this week, oil prices had surged to four-month highs after industry sources reported that Saudi Arabia's Red Sea export hub in Yanbu had suspended crude loadings following attacks on the East-West pipeline. The pipeline, a crucial export route for Saudi Arabia, was targeted after Iran blocked the Strait of Hormuz following U.S. and Israeli strikes against the country in late February.

This blockade had previously cut off one-fifth of the world's oil supply. The East-West pipeline suffered damage to two pumping stations in a recent attack, with repair plans still uncertain.

Despite the recent price drop, worries persist over the escalating conflict in the Middle East. Saudi warplanes have been targeting Yemen, while Houthi forces have retaliated with drone and missile strikes on Saudi cities. Iran-backed Houthis also claimed responsibility for a recent offensive, highlighting the ongoing instability in the region.

Meanwhile, the U.S. Energy Information Administration reported that U.S. crude inventories had decreased slightly more than expected last week, with a draw of around 640,000 barrels compared to the anticipated 1.62 million-barrel draw, according to a Reuters poll of energy analysts.