Oil Prices Decline as Middle East Supply Concerns Ease
Oil prices edged lower on Tuesday as investors took note of signs that crude exports from the Middle East are recovering. Brent crude futures settled at $102.59 a barrel, down 2.6%, while US West Texas Intermediate crude closed at $89.38, down 3.5%. Despite this decline, oil prices are still poised for monthly gains: Brent is expected to rise around 13% and WTI about 4%.
The Saudi East-West pipeline has resumed operations, enabling oil tanker loadings from the Red Sea port of Yanbu. This improvement in supply has reduced Iran's bargaining power as US-Iran negotiations continue. 'US/Iran negotiations are also continuing and while seemingly far apart, both are looking for an off-ramp,' said Dennis Kissler, senior vice president of trading at BOK Financial.
The White House is urging the European Union to draw down diesel emergency inventories in a bid to lower global prices. However, several EU member countries have not released as much oil and refined products from reserves as promised. US President Donald Trump is considering regulatory relief that would allow broader sales of red-dyed diesel.