Oil Prices Retreat from $110 as Saudi Repairs Progress

Oil prices have retreated from their recent highs near $110 and $106 as Saudi Arabia makes progress in repairing its damaged export infrastructure. Brent crude fell by about 1% to around $104 a barrel, while West Texas Intermediate traded near $101.

The market's relief has come from the prospect of returning Saudi volumes, which will help alleviate some physical pressure on supply chains. Saudi Aramco is also offering additional crude to Asian buyers through ship-to-ship transfers near Oman, giving traders confidence that exports can continue despite infrastructure damage.

However, analysts note that Hormuz remains a bigger unresolved risk, with only four commodity vessels passing through the strait on Thursday compared to an average of 16 over the past 10 days. Iran's Revolutionary Guard has also struck a Togo-flagged tanker attempting to pass through the strait, keeping the risk of further disruption elevated.

Despite this, Brent remains comfortably above $100, supported by continued restrictions around Hormuz and disruptions to other global supplies. The US supply picture is more balanced than earlier private data suggested, with commercial crude inventories falling by about 640,000 barrels last week to 423.4 million barrels.