Oil prices fell at the start of trading on Thursday, with Brent crude futures down $1.24, or 1.2%, at $104.59 a barrel by 00:49 GMT, while U.S. West Texas Intermediate futures fell $1.14, or 1.1%, to $101.29.
Both crude benchmarks extended their losses after falling by about $3 on Wednesday, following reports that eased concerns over supply disruptions in the Middle East, after oil prices had risen to their highest levels in nearly 4 months earlier in the week.
Plan to restore East-West pipeline operations
Saudi Aramco is working to bypass the damaged section of the 1,200-kilometer East-West pipeline, with the aim of restoring about half of its operating capacity within days and its full capacity within roughly 6 weeks, according to a person familiar with the matter.
The pipeline carried between 4 and 5 million barrels of oil per day before Saudi Arabia announced its precautionary shutdown after it was targeted. That volume is equivalent to about 4% to 5% of global oil supplies. The partial restart plan helped reduce the risk of short-term supply shortages, despite continued concerns that the war in the Middle East could intensify.
Concerns over tight supplies have eased slightly, while expectations of progress toward easing tensions in the Middle East ahead of next week’s U.S.-China summit are also limiting price gains
U.S. crude inventories fall less than expected
Meanwhile, the U.S. Energy Information Administration said on Wednesday that U.S. crude oil inventories fell by about 640,000 barrels last week, compared with energy market analysts’ expectations for a decline of 1.62 million barrels.
