FOCUS – Oil prices stabilise near 100 dollars amid tensions in the Middle East

Oil prices remained largely stable today as the market weighs the increase in crude oil exports from the Middle East and the G7 countries’ plan to release crude oil and diesel from strategic reserves, against supply concerns due to attacks by the Iran-backed Huthi rebels in Yemen, according to Reuters.

At 12:33 New York time, Brent was at 100.03 dollars a barrel, 29 cents or 0.3 percent lower, while US WTI rose by 16 cents or 0.2 percent to 89.59 dollars. Brent was on course to record its lowest close since September 22.

According to analyst John Evans of the oil brokerage company PVM, the reason for Brent to stay well above the psychological level of 100 dollars is weakening for the moment, as the market is assuming that more oil will reach the market.

The chief executive of the commodities trading giant Vitol said that during the last 7-10 days, around 12 million barrels of crude oil a day, as well as around 2 million barrels a day of refined products, have been shipped from the Middle East.

These volumes are considered sufficient to ease the pressure on prices.

Saudi Energy Minister Prince Abdulaziz bin Salman also declared that the amount of oil transported through the East-West pipeline to the Red Sea export centre of Yanbu had reached 5.8 million barrels by this morning.

However, the fall in prices has been limited by fears of further supply disruptions.

Saudi airports in Jazan and Najran were hit last night in two attacks that wounded three people and caused limited damage.

The attacks occurred while Yemeni government forces, backed by Saudi Arabia, have launched a major offensive against the Huthi rebels.

At the same time, the Saudi-led coalition said it had intercepted and destroyed a ballistic missile launched by the Huthis.

The International Energy Agency (IEA) is expected to meet next week to determine the details of a release of diesel reserves, while uncertainty is growing over the amount the US and Europe will bring to the market.

Diesel prices have risen significantly, turning the fuel widely used in road transport, agriculture and industry into an important economic and political issue.