Oil prices fall on Wednesday

Oil prices extended their declines on Wednesday as investors focused on improved Gulf supplies following Saudi Arabia’s restart of a key pipeline and hopes for a diplomatic solution to the US-Iran war.

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

Saudi Arabia restarted operations on its East-West Pipeline to the Red Sea on Tuesday after drone attacks forced its closure on September 11, according to three sources briefed on the matter. The pipeline can reroute around 4 million barrels per day to Yanbu, bypassing the Strait of Hormuz.

Saudi Arabia also offered additional crude volumes to Asian refiners from locations outside the Strait of Hormuz, while Iraq said it was increasing oil exports to more than 3 million barrels per day.

Meanwhile, US crude inventories rose by 1.8 million barrels in the week to September 18, contrary to analysts’ expectations for a decline, adding further pressure on prices.

Hopes for a diplomatic solution to the conflict also weighed on oil prices after US President Donald Trump said his envoys had held productive talks with Iranian mediators.

Attribution: Reuters