Oil prices fall 1% on hopes of limited supply disruptions

Oil prices experienced a slight decline of 1% on Thursday as traders hoped for limited supply disruptions from conflicts in the Middle East. Despite fresh strikes between Saudi Arabia and Yemen's Houthi rebels, Brent crude futures dropped by US$1.01 to US$103.77 per barrel, while US West Texas Intermediate futures fell by US$1.03 to US$100.88 per barrel.

The markets showed little concern over the ongoing tensions, as oil prices had previously reached four-month highs due to concerns about suspended crude loadings at Saudi Arabia's Red Sea export hub and cancelled deliveries to Europe. The East-West pipeline, a crucial link to Yanbu, was damaged in an attack, leading to estimates of a potential 4% reduction in global oil supply if repairs take longer than expected.

Saudi Arabia attempted to partially mitigate the disruption by offering more crude cargoes to Asian refiners through ship-to-ship transfers. US Energy Secretary Chris Wright stated that crude should resume flowing through the pipeline within days. However, uncertainty remained, with JPMorgan stating on Thursday that it lacked a clear baseline view for oil markets for the first time since the US-Israeli war on Iran began.