Oil price slides to 11-day low as US-Iran diplomacy hopes grow, Saudi export
Saudi Arabia's oil exports recovered to over 4 million bpd in September after falling to 2.4 million bpd in August amid disruptions.
Highlights:
- Brent, WTI touch lowest since 10 September
- Houthis say they attacked "sensitive" sites in Riyadh
- Trump says he may meet Iran's president at UN assembly
- Saudi Aramco ramps up exports via Hormuz Strait
Oil prices fell towards $100 a barrel today (21 September), hitting their lowest in 11 days, as investors hoped for diplomatic progress on the Iran war during this week's UN General Assembly and watched for a recovery in Saudi shipments.
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Brent oil prices fell $2.69, or 2.6%, to $101.18 per barrel today, after briefly falling to their lowest level since 10 September.
US West Texas Intermediate (WTI) crude for October, which expires on Tuesday, also fell $2.69, or 2.7%, to $97.61 a barrel. The November contract stood at $93.49.
Tim Waterer, chief market analyst at KCM Trade, said expectations of a possible diplomatic opening were removing some of the risk premium from oil prices. "It seems that a degree of risk premium is being removed from oil prices on hopes that a diplomatic path to de-escalate the US-Iran war may arrive this week," he said.
Iran and the United States exchanged fresh threats on Sunday, although US President Donald Trump said he was open to meeting Iranian President Masoud Pezeshkian, who is expected in New York this week for the UN General Assembly.
Iran has conveyed conditions to mediators for resuming negotiations, Al Jazeera reported, citing Iran's security chief Mohsen Rezaei.
Yesterday, a spokesperson for Iran's Revolutionary Guards warned that Tehran would deploy new weapons and strike previously untargeted locations if the United States launched another offensive, according to Fars news agency.
Fighting in the region continued. Yemen's Iran-backed Houthis said they had launched missile and drone attacks against "sensitive" locations in Riyadh on Saturday and an Aramco facility in Yanbu, a major Saudi oil export centre on the Red Sea.
Three Iranian sources said China had asked Tehran to help restrain the Houthis following an appeal from Saudi Arabia.
Houthi attacks on Saudi Aramco's East-West pipeline have affected exports through Yanbu, prompting the company to increase shipments through the Strait of Hormuz in September and October.
"Middle East oil flows remain surprisingly strong despite the disruption to Saudi Arabia's East-West pipeline," JPMorgan analysts said in an 18 September note.
Satellite data showed Saudi oil flows through the Strait of Hormuz averaged 2.9 million barrels per day over the past six days, up from 700,000 bpd in August, according to the analysts.
"The most notable pivot has come from Saudi Arabia," the analysts said, as the recovery in shipments provided some reassurance about near-term oil availability.
Meanwhile, Libya's National Oil Corporation Chairman Massoud Suleman told Reuters that production at the Sharara oilfield had been partially reduced, without giving a reason.
