Crude Oil Prices Settle Higher Amid Saudi Shipping Disruption

Investing.com – Crude oil prices settled higher Thursday as Saudi Arabia halted oil shipments through a key Red Sea strait after two of its oil tankers were attacked.

On the New York Mercantile Exchange for September delivery gained 31 cents to settle at $69.61 a barrel, while on London’s Intercontinental Exchange, climbed 0.73% to trade at $74.47 a barrel.

Saudi Arabia temporarily paused shipments through the Bab el-Mandeb strait, which joins the Red Sea to the Gulf of Aden, after two of its oil tankers were reportedly attacked by Houthi rebels.

An estimated 4.8 million barrels per day of crude oil and refined petroleum products — destined for Europe, the US and Asia — flowed through this waterway in 2016, according to the U.S. Energy Information Administration.

The disruptions in the Middle East come at time of concern over the potential for further disruptions in Libya, Venezuela and Iran.

“The potential for further disruptions remains high in Libya, Venezuela and Nigeria with last week seeing new disruptions in Norway and Iraq, and Saudi has little incentive to let inventories rise,” Goldman Sachs said in a note to clients Thursday.

Crude oil prices were also supported by data showing crude oil prices fell to their lowest level since 2015 as exports jumped and imports fell sharply.

Inventories of U.S. crude fell by 6.147 million barrels for the week ended July 20, more than expectations for of 2.600 million barrels, according to data from the Energy Information Administration (EIA).

Imports fell by 2.518 million barrels a day (bpd) and exports rose by 1.222 million bpd, the EIA said Wednesday.

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