Oil prices eased on Thursday, extending losses on reports of Saudi Arabia offering extra crude cargoes through Oman, which reduced fears of supply disruptions, but stayed above $100 on concerns about the Middle East conflict expanding.
Brent crude futures dropped $1.88, or 1.8%, to $103.95 a barrel, while United States (US) West Texas Intermediate futures were down $1.77, or 1.7%, at $100.66 a barrel. Both contracts fell about $3 on Wednesday.
“Concerns over supply tightness eased slightly following news that Saudi Arabia would ship cargo via Oman,” said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, a unit of Nissan Securities.
“Expectations of progress toward easing tensions in the Middle East ahead of the US and China summit next week are also capping price gains,” he added.
Saudi Arabia is offering more loadings of crude oil to Asian refiners via ship-to-ship transfers off Oman’s Sohar port, people familiar with the matter said, blunting some of the hit to global supply from attacks on Saudi Arabia’s East-West pipeline to the Red Sea.
However, some analysts were expecting these flows to only ease a portion of the supply loss from the kingdom’s Red Sea port, capping the declines in oil prices.
The pick-up in flows through the Strait of Hormuz “is only partly offsetting lost export barrels following drone attacks that shut Saudi Arabia’s East-West pipeline,” Saxo Bank analysts said in a note.
