On Wednesday, oil prices fell by about 4%, reaching $104.80 per barrel. This decline occurred following U.S. government efforts to reduce concerns about potential disruptions in Saudi oil supply due to damage to the country's East-West pipeline.
Details of Oil Price Changes
Brent crude oil, recognized as the international benchmark, reached $104.80 per barrel, reflecting a 3.8% decrease from the previous close. Additionally, West Texas Intermediate (WTI) oil prices also fell by 4%, reaching $101.59 per barrel. This price drop followed increases in the previous two sessions.
Impact of Damage to Saudi East-West Pipeline
Chris Wright, U.S. Secretary of Energy, stated that the damaged East-West pipeline in Saudi Arabia is expected to resume operations in the coming days and described the disruption as temporary. However, some independent analysts warned that repairs could take several weeks.
This pipeline transports crude oil from Saudi Arabia's eastern oil-producing regions to the port of Yanbu on the Red Sea, allowing ships to bypass the Strait of Hormuz. While this route is currently unavailable, Saudi Arabia is increasing oil exports with the assistance of U.S. military support through this strategic waterway.
Pressures from U.S. Oil Inventory Data
Oil prices were also pressured by U.S. oil inventory data. According to government data, commercial crude oil inventories in the United States decreased by 640,000 barrels in the week ending September 11, reaching 423.4 million barrels. This decline was less than market expectations, limiting the supportive effect of this data on prices. Additionally, inventories at the Cushing, Oklahoma delivery hub have also decreased.
This official data contrasts with a previous estimate from the American Petroleum Institute, which indicated that oil inventories had increased by 7.1 million barrels. This discrepancy could impact future predictions for the oil market.
Read more: Increase in Interest Rates and Its Impact on Consumers
