Oil Prices Fall as US Crude Inventories Rise

Global oil prices fell on Wednesday after an unexpected increase in US crude inventories eased some supply concerns, despite disruptions to Saudi Arabia’s oil-export infrastructure.

Brent crude futures fell 93 cents, or 0.86%, to $107.82 a barrel, while US West Texas Intermediate (WTI) crude declined 97 cents, or 0.92%, to $104.86 a barrel.

Both benchmarks had gained more than $3 on Tuesday, reaching their highest levels since May 19, amid growing concerns over supply disruptions in Saudi Arabia.

Saudi Arabia temporarily suspended oil loadings at its Yanbu terminal after an attack on the country’s East-West pipeline, which transports crude to the Red Sea. The disruption also raised concerns about Saudi oil shipments to Europe.

However, the latest US inventory data put some downward pressure on prices. According to market sources citing preliminary data from the American Petroleum Institute, US crude inventories increased by 7.1 million barrels in the week ending September 11. Analysts had expected inventories to decline by around 1.6 million barrels.

US gasoline and distillate inventories also rose during the week, adding to the pressure on oil prices.

Saudi Arabia’s East-West pipeline is an important alternative route for transporting crude without using the Strait of Hormuz. The pipeline normally handles around 4 million barrels per day, equivalent to approximately 4% of global oil supply.

The duration of the disruption remains uncertain. US Energy Secretary Chris Wright said oil flows through the pipeline could resume within days, while other estimates suggested repairs could take several weeks.

Despite the rise in US inventories, the global oil market remains under pressure because of supply disruptions and heightened geopolitical tensions in the Middle East.