WTI Prices Slip as Geopolitical Risk Premiums Cool Down Amid Saudi Pipeline Progress

Oil prices have slipped for a third straight session as geopolitical risk premiums cool down. West Texas Intermediate (WTI) crude is trading around $96.40 per barrel in Asian hours on Friday. Saudi Arabia is working to restore its East-West pipeline capacity, with about half of it expected to be back online within days and full operations anticipated within six weeks.

The diplomatic efforts involving China, Iran, and the US are also easing market concerns over supply disruptions. China has urged Iran to help rein in Houthi militants following a direct appeal from Riyadh. The US is considering whether to resume military strikes on Iran ahead of an upcoming gathering with Gulf leaders in New York.

The lower energy prices have provided some relief for bonds after the latest Federal Reserve decision, which was hawkish and resulted in a sharp sell-off. Strategists at Societe Generale noted that the bond market received a helping hand from lower oil and gas prices at the open this morning.