(Sept 17) : Oil dropped for a second day on signs of easing Middle East supply disruptions, with a key pipeline being restored.
West Texas Intermediate fell toward US$102 a barrel, after losing 3.2% on Wednesday, the most since Aug. 4, while Brent closed near US$106. Saudi Arabia is seeking to return about half the capacity of its damaged East-West pipeline within days, and full operations in six weeks, a person familiar said.
“I wouldn’t call it an all-clear situation,” said Haris Khurshid, chief investment officer at Karobaar Capital LP. “The market is getting some capacity back, but it isn’t getting its margin for error back.”
Crude has rallied by about three-quarters this year, as the US-Iran war cut Middle East flows and the Russia-Ukraine conflict drags on. Surging crude and fuel costs have fanned global inflationary pressures, prompting the Federal Reserve to raise interest rates on Wednesday and signal more tightening.
The East-West pipeline — which carries oil across Saudi Arabia to its Red Sea coast — was damaged in attacks last week, boosting crude prices. The conduit has emerged as a vital workaround to shipments going via the Strait of Hormuz, which remains contested by Washington and Tehran.
US Energy Secretary Chris Wright told Fox Business that 18 million barrels of crude and products went through Hormuz earlier this week. The seven-day average of flows through the waterway — which links the Persian Gulf to global markets — was 11 million barrels a day, he said.
In the US, Congress gave final approval to a bill to hand President Donald Trump new powers to impose tariffs on countries buying Russian petroleum products, potentially including China and India. The legislation, which goes to Trump’s desk for his signature, has been celebrated by Ukrainian officials eager for signs of Washington’s support in its fight against Moscow’s invasion.
Kyiv has for months been targeting Russian refineries with waves of drone attacks. That has prompted Moscow to ban most exports of diesel to prioritize local supplies, and officials are considering extending the curb through October. US retail prices of the industrial fuel have advanced to a record.
uploaded by Isabelle Francis