Oil prices continued to fall on Wednesday as supply in the Gulf region improved
Oil prices are declining due to an improving supply outlook and hopes surrounding US-Iran talks. Saudi Arabia has restarted operations on the East-West oil pipeline. Following the resumption of operations by Saudi Arabia and the resulting improvement in supply within the Gulf region, oil prices continued their downward trend on Wednesday.
As of 06:51 GMT, Brent crude futures fell 78 cents (0.79 percent) to $98.47 per barrel, while WTI crude futures dropped $1.21 (1.34 percent) to $89.31 per barrel.
Both contracts have declined for six straight sessions, hitting their lowest levels in approximately two weeks.
While warning on Tuesday that he could "destroy" Iran, Trump also noted that his representatives, Steve Witkoff and Jared Kushner, had held productive talks with Iranian intermediaries aimed at ending the conflict.
The improved supply outlook and efforts to end the conflict, which has been ongoing for nearly seven months, caused Brent crude to close below $100 on Tuesday.
The probable meeting between US and Iranian delegations in New York offers a glimmer of hope to investors. Despite the persistence of harsh rhetoric at times, the market is choosing to price in the possibility of negotiations.
Amid signs of increased oil flows from the Middle East, Saudi Arabia resumed operations on Tuesday on the East-West Pipeline, which runs to the Red Sea.
Unmanned aerial vehicle (UAV) attacks had forced the Kingdom to shut down the pipeline and halt crude oil loadings at the Port of Yanbu on September 11.
Since the conflict waged by the US and Israel against Iran disrupted oil shipments from Saudi Arabia and its Gulf neighbors through the Strait of Hormuz, the Riyadh administration has been using this pipeline to divert a daily flow of approximately 4 million barrels of oil (about 4% of global supply) to Yanbu.
On Tuesday, Saudi Arabia also offered additional oil to Asian refiners for delivery from points outside the Strait of Hormuz.
Iraq announced that it had increased its oil exports. The country stated that it was exporting over 3 million barrels per day and aimed to raise exports via Turkey to more than 600,000 barrels per day.
In another development adding downward pressure on oil prices, industry data showed that US crude oil inventories rose by 1.8 million barrels in the week ending September 18, whereas analysts had expected a decline.
Official weekly inventory data from the US Energy Information Administration (EIA) is scheduled for release at 14:30 GMT.
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