(Bloomberg) — Oil extended the biggest drop in more than six weeks on signs of easing Middle East supply disruptions, with a key pipeline being restored.
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West Texas Intermediate fell toward $102 a barrel, after losing 3.2% on Wednesday, the most since Aug. 4, while Brent closed below $106. Saudi Arabia is seeking to return about half the capacity of its damaged East-West pipeline within days, and full operations in about six weeks, a person familiar said.
US Energy Secretary Chris Wright told Fox Business that 18 million barrels of crude and products went through the Strait of Hormuz earlier this week. The seven-day average of flows through the waterway — which links the Persian Gulf to global markets — was 11 million barrels a day, he said.
Crude has rallied by about three-quarters this year, as the US-Iran war curbed Middle East supplies and the Russia-Ukraine conflict drags on. Surging crude and fuel costs have fanned global inflationary pressures, prompting the Federal Reserve to raise interest rates on Wednesday and signal further tightening.
The East-West pipeline — which carries oil across Saudi Arabia to its Red Sea coast — was damaged in attacks last week. The conduit has emerged as a critical workaround to shipments through Hormuz, which remains contested by Washington and Tehran.
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