Oil prices reversed initial losses (Brent back above $100) on Wednesday amid persistent Middle East supply risks, as investors weighed the prospect of improved Saudi export flows and U.S.-Iran diplomacy against the potential for further disruptions.
Saudi Arabia has begun testing its East-West pipeline for structural integrity and pressure, a step toward restoring oil flows after attacks knocked out the route earlier this month. Crude exports from the Red Sea port of Yanbu could restart within a couple of days if the tests are successful, The Wall Street Journal reported, citing people familiar with the matter.
U.S. envoy to the Middle East Steve Witkoff said in a post on X that American officials engaged in lengthy talks with the Iranian delegation through mediators on the sidelines of the United Nations General Assembly. The mediators shuttled between the two sides throughout the day and completed a round of discussions that the U.S. hopes will prove constructive and promising, he said.
Reports of fresh attacks this morning didn't help any diplomatic optimism, but expectations (driven by last night's API report) suggest crude stocks stabilizing while product stocks are drawing down...
API
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Crude +1.8mm
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Cushing +2.1mm
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Gasoline -2.2mm
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Distillates -2.2mm
DOE
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Crude +2.97mm
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Cushing +2.27mm
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Gasoline -1.69mm
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Distillates -428k
Cushing stocks bounced off 'tank bottoms' and crude inventories jumped last week while product stocks both saw modest draws...
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