Oil prices fall 1% on hopes of limited supply disruptions

On September 18, oil prices experienced a 1% decrease, continuing a downward trend for the third consecutive day, but remained above $100 per barrel. Brent crude futures declined by $1.01, or 1%, to $103.77 a barrel, while US West Texas Intermediate futures dropped by $1.03, or 1%, to $100.88 a barrel. Market participants largely disregarded concerns about potential supply disruptions despite fresh strikes exchanged between Saudi Arabia and Yemen's Iran-backed Houthis across their border on Thursday.

The Middle East conflict had escalated on Thursday, with Saudi Arabia canceling some European deliveries after its East-West pipeline was damaged in an attack last week. The pipeline's reopening timeline and impact on global oil supply remain uncertain, with estimates varying among industry sources. Saudi Arabia aims to restore approximately half of the pipeline's capacity within days, while US Energy Secretary Chris Wright believes crude should resume flowing through the pipeline within days.

Iran's Revolutionary Guards Navy reported an attack on a Togo-flagged oil tanker attempting an illegal passage through the Strait of Hormuz on Thursday. The ongoing US-Iranian conflict has left JPMorgan without a clear baseline view for oil markets since the start of the US-Israeli war on Iran.