Saudi Arabia Assures Full Oil Shipments, Balancing Market
Saudi Arabia Maintains Oil Shipments to North Asian Customers
Saudi Arabia is taking steps to stabilize the oil market by ensuring full volumes of oil are shipped to its North Asian customers, despite its output cuts. This commitment has resulted in a decrease in the price per barrel. On Wednesday, crude prices fell nearly 3%, following a 4% surge earlier in the week due to concerns about supply disruptions in the Middle East. Although the market remains uncertain, Saudi Arabia’s assurance of full oil shipments has added some stability.
Crude Oil Prices Experience Decline
The price of New York-traded West Texas Intermediate (WTI) crude for November delivery settled down 2.9% at $83.49 per barrel. The decline in prices continues from Tuesday’s 0.5% drop in the US crude benchmark. London-traded Brent crude for the most-active December contract settled down 2.1% at $86.48 per barrel. The market has been on weak footing since Tuesday, as concerns over potential supply disruptions in the Middle East have not been substantiated.
Saudi Arabia’s Commitment to Supply
Despite the market’s uncertainty, Saudi Aramco, the state oil firm, has informed North Asian refiners that it will supply them with the full contractual volumes nominated for November. This contradicts the belief that Saudi Arabia’s priority is to keep the market tight. Instead, they are ensuring that oil supplies are readily available as needed. This commitment demonstrates that Saudi Arabia wants higher official selling prices for their Arab Light crude, and is willing to meet the demands of its customers.
Market Outlook and US Weekly Oil Inventory Data
Traders are skeptical about the need for further increases in crude oil prices. The market is eagerly awaiting the release of US weekly oil inventory data, which will provide insights into the current supply levels. The American Petroleum Institute (API) will release the data on US crude, gasoline, and distillate inventories for the week ending October 6. Analysts expect a slight drop in crude oil inventories compared to the previous week. Gasoline inventories are expected to show a draw, while distillate inventories are expected to decrease as well.
Overall, Saudi Arabia’s commitment to maintaining full oil shipments to North Asian customers has helped stabilize the market. However, traders remain cautious about further price increases and are closely monitoring the US weekly oil inventory data for any potential supply disruptions.
