Middle East Oil Flows Edge Up, Prices Drop

Oil prices have been fluctuating in recent days as traders await further signals about Middle Eastern oil flows. Brent crude for December delivery dropped below $97 a barrel, while West Texas Intermediate (WTI) was near $89.

The current situation is a result of the ongoing tensions between Iran and other countries in the region, which have led to disruptions in oil shipments through the Strait of Hormuz. Despite these challenges, analysts believe that crude flows from the Middle East are nearing pre-war levels, although fuel supplies have yet to recover fully.

Goldman Sachs estimates that about 23 million barrels a day of oil left the Middle East in the last week, with most of it coming through the Strait of Hormuz and other export routes. This is in line with last year's average, but inventories have fallen by more than 500 million barrels since February.

Rebecca Babin, senior energy trader at CIBC Private Wealth Group, said that reports of increased flows through Hormuz 'look directionally correct, even if the exact volumes are difficult to verify.' The narrowing spread between WTI's two nearest contracts suggests that near-term conditions have become less tight.