Saudi Oil Restart Boosts Global Supply Outlook, Weighing on Prices
Oil prices declined on Wednesday as investors became more optimistic about global supply after Saudi Arabia restarted operations at its East-West Pipeline to the Red Sea. The pipeline, which had been shut down since September 11 due to drone attacks, can reroute around 4 million barrels per day, or 4% of global supply, to Yanbu port.
The restart of the pipeline and increased oil exports from Iraq have improved the global supply outlook, leading to a decline in oil prices. Brent crude futures fell $1.09, or 1.1%, to $98.16 a barrel, while West Texas Intermediate futures fell $1.50, or 1.67%, to $89.01 per barrel.
US President Donald Trump's comments on Tuesday also weighed on oil prices, as he expressed hope for a diplomatic solution to the US-Iran conflict. Despite his tough rhetoric, including threats of 'annihilation', the market is choosing to price in the possibility of talks.