Oil Falls to Two-Week Low as Gulf Supply Outlook Improves

• Oil prices fell to a two-week low on Tuesday as prospects for increased oil supplies from the Gulf eased market concerns. Iran signalled that it could reopen the Strait of Hormuz within seven days, while Saudi Arabia was set to resume exports from its Red Sea port of Yanbu. The November Brent crude futures contract fell $2.01, or 2%, to $98.33 a barrel at 1027 GMT. The October WTI contract, which expires on Tuesday, lost $2.50, or 2.61%, to $93.28 a barrel.
• Brent November, WTI October and WTI November all touched their lowest levels since September 8. Iran can reopen ⁠ the Strait of Hormuz within seven days if the United States eases military pressure and lifts its blockade on Iranian ports, a senior Iranian official told Reuters on Tuesday.
• The official said that the Iranian delegation to the United Nations General Assembly in New York has full authority to revive diplomacy with the United States. Hamad Hussain, senior climate and commodities economist at Capital Economics, said oil prices appeared to be falling on media reports that Iran may be willing to reopen the Strait of Hormuz within seven days, which could signal that diplomatic efforts are working. Before US-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies.
• Further weighing on prices, Saudi Arabia restarted operations on its East-West Pipeline and could resume exports from the Red Sea port of Yanbu later on Tuesday, according to three sources briefed on the matter. Two of the sources said the pipeline was operating at a low rate. Market attention is also focused on US President Donald Trump's meetings with world leaders at the UN General Assembly this week, against the backdrop of an unstable Middle East and a four-and-a-half-year war in Ukraine that shows no signs of abating.
• Meanwhile, Saudi Aramco has increased exports through the Strait of Hormuz after attacks on its East-West Pipeline forced it to halt some shipments through Yanbu. Around 14 million barrels of its crude oil were loaded on ⁠ seven supertankers inside the Gulf on Sunday, tanker tracking data showed.
• Ole Hansen, head of commodity strategy at Saxo Bank, noted that he does not see much further downside in oil prices until there is increased supply through the Strait of Hormuz, particularly refined products, where the real ⁠ crunch remains. Diesel prices have rallied in Europe and the United States to record highs as wars in Iran and Ukraine sharply cut exports from some of the biggest producers such as Russia, Saudi Arabia and the United Arab Emirates.

(Source: Reuters)