On Thursday, October WTI crude oil (CLV26) fell by $0.52, or 0.51%, closing at a notable low as Saudi Arabia announced plans to reinstate half of the capacity of the East-West pipeline following recent disruptions. This pipeline, which can transport 7 million barrels per day (bpd), was shut down after drone strikes by Houthi rebels. In contrast, October RBOB gasoline (RBV26) rose by $0.0223, or 0.64%, reaching a 1.75-month peak due to tightening supplies as refiners shift production from gasoline to diesel amid record diesel prices.
Recent reports indicate that Saudi Arabia’s crude production fell to 6.238 million bpd in August, the lowest level since 1990, while Vitol Group noted a loss of about 2 million bpd from crude exports in the Middle East. Compounding these issues, drone attacks by Ukraine have curtailed Russian oil production, with output in July dropping to 8.89 million bpd, the lowest in six years. Moreover, the International Energy Agency (IEA) predicts a global oil deficit of 1.7 million bpd for the year due to restricted supply, with high prices expected to result in decreased demand.
As of September 11, U.S. crude oil inventories were 0.8% above the five-year seasonal average, while gasoline inventories were 4.8% below. Crude oil production slightly declined to 13.944 million bpd, while the number of active U.S. oil rigs rose by one to 450.
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