Oil Price Drop Sends Markets Higher Amid Supply Confusion
Oil prices dropped on conflicting reports of increased supply from the Middle East. The Brent price fell 2% after hopes rose that Saudi Arabia would quickly restore oil flows through its East-West pipeline following a weekend attack by the Houthis.
US Central Command head Admiral Brad Cooper said oil cargo and liquefied natural gas volumes in the past two weeks were higher than at any point in the past six months. However, shipping data showed just 12 commodity vessels transited the Strait of Hormuz on Saturday and Sunday, down from 35 during the previous weekend.
Analytics firm Kpler reported exports from Saudi Arabia had recovered to over 4 million barrels per day (bpd) so far in September after slumping to 2.4 million bpd in August, the lowest since at least 2013. JPMorgan analysts said satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million bpd over the past six days, up from just 700,000 bpd in August.
The drop in oil prices helped lift most share markets, with tech leading South Korea up more than 1%. Nasdaq futures added 0.6% and S&P 500 futures 0.4%. European share futures also nudged higher, despite news of Chancellor Friedrich Merz's mainstream conservative party suffering its worst election results since 1949.