Oil Above $100.. But Fears Recede Partially

In the energy market, oil prices fell for a second session as fears over the scale of supply disruptions temporarily eased. Brent crude dropped to around $104.30 per barrel, while West Texas Intermediate (WTI) crude fell to approximately $101.30, amid reports of Saudi moves to increase crude shipments through the Sultanate of Oman, which alleviated some concerns about supply shortages. Saudi Arabia is also working to restore part of the capacity of the damaged East-West pipeline, which could help ease supply pressures in the coming period. However, the situation remains highly sensitive; vessel-tracking data showed that only three commercial ships transited the Strait of Hormuz, compared to 12 previously, while the number of ships passing through the Bab el-Mandeb strait also declined. Thus, the pullback in oil prices from their recent peaks does not mean that risk premiums have disappeared, but rather reflects, in part, improved supply expectations, while any new developments in the Strait of Hormuz or Bab el-Mandeb could still reignite prices.