Oil prices fell on Wednesday after an unexpected increase in US crude inventories, as investors assessed supply risks following Saudi Arabia’s suspension of oil loading operations at Yanbu port after an attack on its East-West pipeline leading to the Red Sea.
Brent crude futures fell 93 cents, or 0.86%, to $107.82 a barrel by 0028 GMT. US West Texas Intermediate (WTI) crude futures declined 97 cents, or 0.92%, to $104.86 a barrel.
Both benchmark contracts closed more than $3 higher on Tuesday, reaching their highest levels since May 19, after the suspension of loading operations at Yanbu heightened supply concerns and Saudi Arabia reduced oil shipments to Europe.
Market sources said on Tuesday, citing data from the American Petroleum Institute (API), that US crude oil, gasoline and distillate inventories rose last week.
US crude inventories increased by 7.1 million barrels in the week ended September 11, the sources said, compared with analysts’ expectations in a Reuters poll for a decline of about 1.6 million barrels.
Sources said on Tuesday that Saudi Arabia suspended oil loading operations at Yanbu after the world’s largest crude oil exporter shut its East-West pipeline following a Friday attack by Yemen’s Iran-aligned Houthis.
Saudi Arabia uses the pipeline to divert nearly 4 million barrels per day, or about 4% of global oil supplies, to the Red Sea port.
The US Department of Energy said crude oil flows through the vital pipeline linking eastern and western Saudi Arabia were expected to resume within days.
However, sources who spoke to Reuters offered varying estimates of how long the pipeline could remain out of service. One source said repairs could take five to six weeks, while another said partial pumping could resume sooner as repair work continues.
In Libya, the National Oil Corporation said operations at three oil fields had been suspended after protesting members of the Petroleum Facilities Guard closed a valve on the Hamada-Zawiya crude oil export pipeline.
However, NOC Chairman Masoud Suleiman told Reuters that Libya’s oil production had been only minimally affected by the shutdowns and remained at around 1.4 million barrels per day.
Source: Reuters
