Oil pares losses after reports Houthis attacked Saudi Aramco refinery
- Brent fell 74 cents to $88.24, WTI down 77 cents at $82.56
NEW YORK: Oil prices pared losses to less than 1 percent after dropping more than 3 percent earlier on Thursday, as reports that Yemen’s Houthis had targeted a Saudi Aramco refinery with drones renewed concerns over supply disruptions in an already tight global market.
The Houthis attacked an Aramco refinery in Saudi Arabia’s Jazan with two drones on Thursday, the Iran-aligned movement’s Saba news agency reported.
A Houthi military source said the attack was in response to what the group described as Saudi violations of Yemeni airspace and sovereignty in Saada and Hajjah provinces.
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Saudi Arabia did not immediately comment on the report.
Brent futures were down 74 cents, or 0.8 percent, at USD88.24 a barrel at 11:58 a.m. EDT (1558 GMT), while US West Texas Intermediate (WTI) crude was down 77 cents, or 0.8 percent, at USD82.56. Earlier in the session, both contracts slid more than 3.5 percent as investors focused on signs of weaker global demand and rising US crude stocks. Reports of the Yemeni attacks also sent diesel cracks to an all-time high.
According to Saudi Aramco’s website, the Jazan refinery has the capacity to produce 250,000 barrels per day (bpd) of ultra-low sulfur diesel.
Global oil demand to fall
Limiting upward pressure, however, was data from the US Energy Information Administration on Wednesday which showed that US commercial crude oil inventories made their largest weekly gain since January 2023 as exports slumped.
Crude inventories rose by 17.4 million barrels to 424.4 million in the week ended August 7, their highest since June 5, the EIA said. In the meantime, OPEC lowered its world oil demand growth forecast for 2026 to 580,000 barrels per day in its monthly oil market report.
The International Energy Agency said it expected a contraction of 1.6 million bpd in consumption this year, versus a forecast of 1 million bpd last month, with demand curtailed by higher prices and restricted supply due to the US-Israeli war with Iran.
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