[International Oil Prices] Brent Crude Surpasses $105... “Saudi Arabia Has Only 5–7 Days of Inventories”

[Financial News]  

International oil prices turned higher on the 14th (local time).
Concerns that the closure of Saudi Arabia’s East-West Petroline could be prolonged pushed oil prices higher. The pipeline transports oil to the Red Sea while bypassing the Strait of Hormuz.
The cancellation of talks on the Strait of Hormuz between Iran and the Gulf states, which had been scheduled for the 14th, also had a significant impact.
Brent crude, the international oil-price benchmark, for November delivery settled at $105.68 per barrel, up 1.02% from the previous session.
West Texas Intermediate (WTI) crude, the U.S. oil-price benchmark, for October delivery settled at $101.39 per barrel, up 1.3%.
Brent crude briefly approached $110 per barrel early in the session, while WTI neared $105.
International oil prices, which surged by around 9% last week, have been rising sharply as tensions between the United States and Iran continue.
The market was unsettled by the damage to Saudi Arabia’s East-West Petroline in an attack on the 11th by the Houthi rebels in Yemen, who are supported by Iran. Saudi Arabia closed the alternative route after the attack but has not disclosed the extent of the damage or how long repairs will take.
The Associated Press reported that operations are expected to be fully or partially suspended for several weeks because of the repair work.
Janiv Shah, an oil market analyst at Rystad Energy, warned in an analysis note on the 14th that oil prices could become volatile again if disruptions to Saudi Arabia’s pipeline supplies persist.
Shah noted, "The relatively limited price reaction so far reflects the market’s view that Saudi Arabia’s oil exports will not face major short-term disruptions, supported by inventories," adding, "However, this trend could change rapidly if the disruption is prolonged." He estimated that Saudi Arabia’s inventories could cushion export disruptions for five to seven days.

[email protected] Song Kyung-jae Reporter