The price of a barrel of Brent crude fell 1.31 percent to $104.67, while the price of U.S. West Texas Intermediate (WTI) crude oil decreased by 1.07 percent to $94.07. WTI thus gave back its gains from the previous trading day.
The Houthis' attack on the headquarters of Saudi Arabia's oil company Saudi Aramco and Iran's announcement that it is implementing new tactics against ships in the Strait of Hormuz had caused the WTI price to reach its highest level in the last three weeks in the previous session.
ATTACKS IN THE STRAIT OF HORMUZ AFFECT OIL SUPPLY
According to statements by maritime authorities, a container ship and a dry cargo ship that were hit by ammunition sank in separate incidents near the Strait of Hormuz on Wednesday.
The attacks, which have increased in the region over the last 10 days, have strengthened concerns about global oil shipments. Iran reported that it has increased its attacks in response to the blockade the U.S. has imposed on its ports and the sanctions that were tightened last month.
Security problems around the Strait of Hormuz, one of the important transit points for world oil trade, have caused disruptions in maritime transport and led to freight costs reaching record levels.
STEP TO FACILITATE OIL SHIPMENTS FROM THE U.S. ON THE AGENDA
The U.S. administration is considering easing sanctions on ships carrying oil from countries such as Russia, Iran, and Venezuela, known as the "shadow fleet," in order to pull down oil prices.
According to information provided by a U.S. official, the discussions are focusing on the option of allowing some previously sanctioned ships to carry "legal oil."
If the plan is implemented, it is aimed to facilitate oil shipments, ease supply pressure in the market, and reduce transport costs. Conversely, the continuation of attacks around the Strait of Hormuz causes risks regarding oil supply to persist.
PRODUCTION INCREASES IN RUSSIA AND THE GULF PULL PRICES DOWN
According to International Energy Agency (IEA) data, Russia's crude oil production increased by 65 thousand barrels per day in September to 8.43 million barrels. However, production remained 870 thousand barrels per day lower compared to the same period last year.
Crude oil exports from producers in the Middle East Gulf also showed an increase of 4.4 million barrels per day in September. Thus, exports reached approximately 75 percent of pre-war levels.
The increase in production and exports strengthened the expectation that the amount of oil offered to the market could rise again. This development was among the factors supporting the downward pressure on oil prices.
11.1 MILLION BARREL DROP IN U.S. CRUDE OIL STOCKS
According to data released by the American Petroleum Institute (API), U.S. crude oil stocks decreased by 11.1 million barrels in the week ending October 9. While a decrease was also seen in distillate stocks in the same period, gasoline stocks increased.
The decline in crude oil stocks is being monitored in terms of the oil demand and supply balance in the U.S. In global markets, in addition to geopolitical developments, possible changes in sanctions, production data, and movements in oil stocks continue to be decisive in the course of prices.
News Source: 12punto
