Oil prices fell for a sixth consecutive trading session on Wednesday, September 23. The market reacted to the resumption of operations on Saudi Arabia’s East-West oil pipeline and expectations of increased supplies from Gulf countries, Reuters reported.
Brent futures fell by $1.09, or 1.1%, to $98.16 per barrel. WTI declined by $1.50, or 1.67%, to $89.01 per barrel.
The previous day, Brent settled below $100 per barrel for the first time since September 8.
Resumption of Saudi route and Iraq’s plans
One of the main factors behind the price decline was the resumption of operations on Saudi Arabia’s East-West oil pipeline, which leads to the Red Sea. It is used to reroute around 4 million barrels of oil per day to Yanbu — approximately 4% of global supplies.
At the same time, Iraq reported an increase in exports. Oil Minister Basim Mohammed said the country is already exporting more than 3 million barrels per day and plans to raise supplies through Turkey to more than 600,000 barrels per day.
Market assessments
“For now, the market is taking a more constructive view of the global oil supply situation than it did a few weeks ago.”
Tim Waterer, chief analyst at KCM Trade
According to Waterer, a meeting between U.S. and Iranian representatives in New York also gave traders “a glimmer of hope” for the possibility of negotiations. Despite the tough rhetoric from both sides, the market is also factoring this into prices.
Previously, the U.S. war with Iran and the shutdown of Saudi Arabia’s bypass oil pipeline led to a global shortage of vessels for transporting crude oil.
