Oil prices fall as US inventories rise
Oil prices fell on global markets on Wednesday after an unexpected increase in US crude inventories, while traders assessed risks to supplies from Saudi Arabia. Oil shipments from the port of Yanbu were suspended following an attack on the East-West pipeline.
As Channel NewsAsia reports, citing Reuters, Brent futures fell by 93 cents, or 0.86%, to $107.82 per barrel. US West Texas Intermediate crude lost 97 cents, or 0.92%, and traded at $104.86 per barrel.
US inventories
Market sources, citing data from the American Petroleum Institute, said US crude oil inventories rose by 7.1 million barrels in the week ended September 11. Analysts polled by Reuters had expected inventories to decline by about 1.6 million barrels.
Gasoline and distillate inventories also increased. Haitong Futures said the unexpected buildup of gasoline and diesel fuel weighed on prices, but the regional increase in inventories does not change the overall tightness in the global crude oil market.
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Disruptions in Saudi Arabia
The previous day, both benchmark oil grades rose by more than $3 and reached their highest levels since May 19. This came amid supply concerns after shipments were suspended in Yanbu and Saudi Arabia cut oil supplies to Europe.
According to Reuters sources, shipments in Yanbu were halted after Saudi Arabia shut the East-West pipeline following an attack on Friday by Iran-linked Yemeni Houthis. About 4 million barrels of oil per day, roughly 4% of global supplies, had been rerouted through this pipeline to the Red Sea port.
The US energy secretary said oil transportation through the pipeline could resume within a few days. At the same time, Reuters sources gave differing assessments of the duration of repairs: one suggested that the work could take five to six weeks, while another did not rule out a partial resumption of pumping earlier.
In Libya, the National Oil Corporation reported the suspension of operations at three fields after protesters from the Petroleum Facilities Guard shut a valve on the Hamada-Zawiya export pipeline. Corporation chairman Masoud Suleiman told Reuters that the country’s production had not been significantly affected and stood at about 1.4 million barrels per day.
