Oil extended the biggest drop in more than six weeks on signs of easing Middle East supply disruptions, with a key pipeline being restored.
West Texas Intermediate fell toward US$102 a barrel, after losing 3.2 per cent on Sept 16, the most since Aug 4, while Brent closed below US$106.
Saudi Arabia is seeking to return about half the capacity of its damaged East-West pipeline within days, and full operations in about six weeks, a person familiar said.
US Energy Secretary Chris Wright told Fox Business that 18 million barrels of crude and products went through the Strait of Hormuz earlier this week. The seven-day average of flows through the waterway – which links the Persian Gulf to global markets – was 11 million barrels a day, he said.
Crude has rallied by about three-quarters this year, as the US-Iran war curbed Middle East supplies and the Russia-Ukraine conflict drags on.
Surging crude and fuel costs have fanned global inflationary pressures, prompting the Federal Reserve to raise interest rates on Sept 16 and signal further tightening.
The East-West pipeline – which carries oil across Saudi Arabia to its Red Sea coast – was damaged in attacks last week. The conduit has emerged as a critical workaround to shipments through Hormuz, which remains contested by Washington and Tehran. BLOOMBERG
