Oil Near Two-Month Low as Gulf Barrels Return and the War Premium Recedes

(MENAFN- MENAFNEditorial) 
Oil remained near a two-month low on Thursday as traders priced a market in which Gulf barrels are reaching buyers despite the tensions around the Strait of Hormuz. OPE’’s report showed crude output rose by almost 2 million barrels per day in October, led by a Saudi recovery towards pre-tensions production. Saudi output jumped 26% in October to 10.56 million barrels per day. Signs of progress in US-Iran and Russia-Ukraine diplomacy added to the pressure.
The war premium in oil is shifting from production risk to delivery risk. Attacks on vessels persist, slowing the decline but are not yet strong enough to reverse it. At the same time, some estimates put the market back into a surplus of 1.4 million barrels per day in October, which could weigh on the market if the trend continues.
US Energy Information Administration data later on Thursday will show whether the crude build reported by the American Petroleum Institute reflects weaker demand. Credible progress in US-Iran talks would extend the slide, while a fresh deterioration in Gulf shipping conditions would rebuild the premium.




 

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