Oil prices experienced a decline of 1% on Thursday, influenced by increased crude exports from the Gulf and an unexpected rise in U.S. oil inventories, which alleviated concerns over supply. Investors are also considering renewed diplomatic efforts between the U.S. and Iran aimed at resolving tensions in the Middle East.
By 0420 GMT, Brent crude futures had decreased by 1.1% to $96.92 per barrel, while U.S. West Texas Intermediate (WTI) crude fell by 1.4% to $89.18 per barrel. Both oil benchmarks had seen an uptick of approximately $1 per barrel the previous day. In September, Brent crude recorded a notable monthly increase of around 14%, marking its most significant gain since July, whereas WTI rose by about 5% over the same period.
Sugandha Sachdeva, the founder of SS WealthStreet, a research firm based in New Delhi, remarked, “The immediate outlook for oil appears negative, as the resurgence of shipments from the Gulf, the resumption of Saudi exports via Yanbu, and the increase in U.S. inventories contribute to easing supply worries.”
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According to reports from Reuters, Saudi Arabia has restarted oil tanker loadings from Yanbu after previously resuming operations on its East-West Pipeline. In the U.S., crude oil inventories rose by 922,000 barrels to reach 427.3 million barrels for the week ending September 25, as reported by the Energy Information Administration. This figure contrasts with analysts’ expectations of a decrease of 264,000 barrels, according to a Reuters survey.
Sachdeva added, “Heightened diplomatic interactions between the U.S. and Iran could further diminish the geopolitical risk premium, although achieving a significant breakthrough is still uncertain.” On Wednesday, Iran announced it had received a response from the U.S. regarding its recent proposal aimed at reviving the stalled ceasefire in the Gulf region.
However, U.S. President Donald Trump refuted claims from Axios and CNN, which cited U.S. officials suggesting he was open to offering sanctions relief to Iran and releasing frozen Iranian assets in exchange for “concrete” actions from Tehran regarding its nuclear program.
Goldman Sachs has estimated that oil exports from the Gulf, including those classified as “dark exports” (ships operating with their location transponders turned off), have rebounded to an average of 23.3 million barrels per day over the past week, aligning with their projections for 2025. The firm noted that exports had doubled in September.
Additionally, sources familiar with the situation indicated that OPEC+ oil-producing nations are expected to maintain their production targets for November during their upcoming meeting on Sunday.
Source: Financial Chronicle Biz English | Sri Lanka Business News.
