Ammon News - Oil prices extended declines on Wednesday as investors eyed ​improved Gulf supply after Saudi Arabia restarted operations at a critical pipeline.
Hopes for a diplomatic solution to the ‌US-Iran war also weighed on prices.

Brent crude futures fell 78 cents, or 0.79%, to $98.47 a barrel as of 0651 GMT while West Texas Intermediate futures fell $1.21, or 1.34%, to $89.31 per barrel.
Both contracts have declined for six consecutive sessions to around two-week lows.

While US President Donald Trump warned on Tuesday that he could "annihilate" Iran, he also said ​his envoys Steve Witkoff and Jared Kushner had held productive talks with mediators of Iran to end the war.

"I think there's a lot ​of momentum for them to make a deal," Trump said.

Optimism around improved supply and a push to ⁠end the nearly seven-month conflict drove benchmark Brent down to close below $100 a barrel on Tuesday for the first time since September ​8.

“The market is currently feeling more constructive about the global oil supply picture than it was a few weeks ago,” said Tim ​Waterer, chief analyst at KCM Trade.
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“The meeting of US and Iranian delegations in New York has given traders a glimmer of hope ... Despite the continued tough rhetoric, including threats of ‘annihilation,’ the market is choosing to price in the possibility of talks.”

On Tuesday, Saudi Arabia restarted operations on its East-West Pipeline to the Red ​Sea, three sources briefed on the matter said, with signs of an increase in Middle Eastern oil flows.

Since the US-Israeli ‌war ⁠on Iran disrupted oil flows from Saudi Arabia and its Gulf neighbours through the Strait of Hormuz, Riyadh has been using the pipeline to reroute around 4 million barrels per day — around 4% of global supply — to Yanbu.

Saudi on Tuesday also offered more barrels to Asian refiners for lifting from locations outside of the Strait of Hormuz.

Iraq, too, is increasing oil exports, its oil minister, Basim Mohammed, said on ​Tuesday. The country is exporting more ​than 3 million bpd, he ⁠said, and expects to boost exports via Turkey to more than 600,000 bpd.

Provisional data from shiptracking firms Vortexa and Kpler pegged Iraqi crude exports in August at 2.3 million and 2.17 million bpd, respectively, up ​from July's level but below February's pre-war level of 3.7 million and 3.362 million bpd.

Adding to downward ​pressure on oil ⁠prices, industry data showed US crude inventories rose by 1.8 million barrels in the week to September 18. Analysts polled by Reuters had expected a decline.

Official weekly inventory figures from the US Energy Information Administration are due at 10:30 a.m. ET (1430 GMT).

Trump said on Tuesday that he backed the idea ⁠of a ​diesel export ban as a way to lower prices that have hit record ​highs due to a global supply shortage. But analysts and market watchers warn that such a measure would do little to ease high energy prices, and could worsen supply ​and economic disruptions around the globe.


Reuters