Saudi Supply Disruptions Eased, Oil Prices Fall for Third Day
Oil prices fell for the third consecutive day as concerns over Saudi supply disruptions eased. The Brent crude futures price dropped by $0.79, or 0.75%, to $104 a barrel, while US West Texas Intermediate futures fell $0.70, or 0.69%, to $101.20 a barrel.
Despite fresh fighting between Saudi Arabia and Yemen's Houthis, markets largely shrugged off concerns about new threats to supplies. Analysts said that recent efforts to restore Saudi export capacity have reduced some of the immediate supply anxiety.
Saudi Arabia is seeking to return about half the capacity of its East-West oil pipeline within days and is offering more crude cargoes to Asian refiners through ship-to-ship transfers off Oman's port of Sohar. However, transporting oil through the region remains risky, with a Togo-flagged oil tanker being struck while attempting to make an 'illegal passage' through the Strait of Hormuz on Thursday.
The key question is whether physical flows can normalise and what could be the timeline, said Priyanka Sachdeva, head of market insights at Phillip Nova. If we see a sustained improvement in Hormuz traffic, some of the geopolitical premium can unwind further.