Oil continues to decline as supply disruption fears recede

Oil prices fell in Asian trading on Thursday, continuing their losses, after reports emerged that Saudi Arabia was shipping additional crude cargoes via the Sultanate of Oman, easing concerns about supply disruptions even as prices remained above $100 a barrel amid worries over the widening conflict in the Middle East.

Brent crude futures dropped 19 cents, or 0.2%, to $105.64 a barrel, while U.S. West Texas Intermediate crude fell 33 cents, or 0.3%, to $102.10 a barrel. Both benchmarks had declined by about $3 a barrel on Wednesday.

Hiroyuki Kikukawa, chief strategist at Nisay Securities Investment, said concerns about supply shortages had “eased slightly.”

He added that expectations of progress toward de-escalating tensions in the Middle East ahead of the upcoming U.S.-China summit next week were also capping price gains.

Saxo Bank analysts noted in a research note that increased flows through the Strait of Hormuz “only partially offset” the barrels of lost exports following drone attacks that led to the closure of Saudi Arabia’s East-West Pipeline.

Oil prices had risen to their highest levels in about four months earlier in the week, after shipping sector sources reported the suspension of oil loading at the Saudi port of Yanbu on the Red Sea, and Riyadh canceled some shipments bound for European clients.

Despite the decline in oil prices, concerns remain about the escalation of war in the Middle East.

In Singapore, DBS Bank’s base-case scenario for the fourth quarter assumes a de-escalation of the U.S.-Iran conflict and Brent crude stabilizing in a range of $85 to $95 a barrel.