Oil slips for third session as traders weigh Saudi pipeline damage
Brent and WTI each fell about 1% as traders bet on alternate routes, even as three pumping stations on Saudi Arabia's East-West pipeline were confirmed damaged.
Oil prices declined for a third straight session on Friday, though both major benchmarks held above $100 a barrel, as expectations of alternative routes for Middle Eastern crude outweighed worries about fresh cross-border strikes between Saudi Arabia and Yemen's Iran-backed Houthis.
Brent crude futures slipped $1.01, or 1%, to $103.77 a barrel, while US West Texas Intermediate fell $1.03, or 1%, to $100.88. Both contracts had ended the previous session down about 1%.
The market's relative calm came despite an exchange of strikes across the Saudi-Yemeni border on Thursday that widened the region's conflict. Prices had earlier climbed to roughly four-month highs after reports that crude loadings at Saudi Arabia's Red Sea export hub of Yanbu had been suspended and that some deliveries to Europe had been cancelled following damage to the East-West pipeline in an attack last week.
Satellite imagery and three industry sources indicate that three pumping stations on the pipeline were damaged — one more than previously assessed. Traders have said a prolonged shutdown of the link to Yanbu could remove as much as 4% of global oil supply.
Estimates of how quickly the pipeline can be restored have varied. Saudi Arabia is aiming to bring back about half of the line's capacity within days, and US Energy Secretary Chris Wright has said crude should be flowing through it within days. The kingdom is also offering additional cargoes to Asian refiners via ship-to-ship transfers off Oman's Sohar port, a step that would offset some of the disruption.
Separately, Iran's Revolutionary Guards Navy said a Togo-flagged oil tanker was struck on Thursday while attempting what it called an illegal passage through the Strait of Hormuz, according to Iranian state media.
Uncertainty over the supply outlook was underscored by JPMorgan, which said it has no clear baseline view for oil markets for the first time since the start of the US-Israeli war on Iran. Washington and Tehran have held no peace talks since an interim agreement in June collapsed within weeks. The war is expected to be discussed at the United Nations General Assembly next week, where an Iranian delegation will be permitted to attend, according to the US State Department.