Oil dips in choppy session on mixed outlook for Saudi exports
The global benchmark edges 0.9% lower to settle near US$104 a barrel, cementing a narrow weekly loss
The global oil benchmark dipped 0.9% on Friday, settling near $104 a barrel, marking a narrow weekly loss as concerns about Middle East supply emerged. Saudi Arabia briefly halted some sales to Europe following attacks on its East-West pipeline, though traders and analysts believed buffer supplies were still adequate. Saudi Aramco aimed to partially restart the pipeline within days and full capacity within six weeks, Bloomberg reported.
Meanwhile, the kingdom increased crude exports from outside the Strait of Hormuz. Scott Shelton, an energy specialist at TP ICAP Group, noted that the resumption of the Yanbu route and increased Hormuz sales appeared to have quelled the physical panic in crude markets. However, Aramco informed European refining customers they would receive no crude next month.
West Texas Intermediate, nearing expiration, settled at $100 a barrel. Despite some optimism, concerns lingered about physical supply, with differentials between North Sea and Mediterranean crude surging to record highs due to pipeline shutdowns. Brent rose about 70% this year amid ongoing conflicts in the Middle East and Russia.
Tightening refined products markets fueled inflation worries, with Goldman Sachs predicting further petrol price increases. Diplomatically, a meeting of Persian Gulf nations was scheduled for the UN General Assembly in New York, and US President Donald Trump hinted at potential re-escalation in the Iran conflict. South Korea, a major Middle East crude buyer, ruled out sending troops to the Hormuz Strait amid US pressure.
Oil's recent decline was viewed by traders more as a cooling of geopolitical risk rather than a fundamental shift, according to Priyanka Sachdeva, head of market insights at Phillip Nova Pte in Singapore. Money managers boosted their long positions on WTI and Brent by 18,254 lots to 429,413 lots in the week ending September 15, the most bullish stance since late May.
Nevertheless, risks persisted in Hormuz shipping routes, with a tanker hit by an unknown projectile while transiting the strait.
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