Oil prices reversed initial losses (Brent back above $100) on Wednesday amid persistent Middle East supply risks, as investors weighed the prospect of improved Saudi export flows and U.S.-Iran diplomacy against the potential for further disruptions.
Saudi Arabia has begun testing its East-West pipeline for structural integrity and pressure, a step toward restoring oil flows after attacks knocked out the route earlier this month. Crude exports from the Red Sea port of Yanbu could restart within a couple of days if the tests are successful, The Wall Street Journal reported, citing people familiar with the matter.
U.S. envoy to the Middle East Steve Witkoff said in a post on X that American officials engaged in lengthy talks with the Iranian delegation through mediators on the sidelines of the United Nations General Assembly. The mediators shuttled between the two sides throughout the day and completed a round of discussions that the U.S. hopes will prove constructive and promising, he said.
Reports of fresh attacks this morning didn’t help any diplomatic optimism, but expectations (driven by last night’s API report) suggest crude stocks stabilizing while product stocks are drawing down…
API
-
Crude +1.8mm
-
Cushing +2.1mm
-
Gasoline -2.2mm
-
Distillates -2.2mm
DOE
-
Crude +2.97mm
-
Cushing +2.27mm
-
Gasoline -1.69mm
-
Distillates -428k
Cushing stocks bounced off ‘tank bottoms’ and crude inventories jumped last week while product stocks both saw modest draws…
The SPR saw a very modest 405k barrel drain last week – the second tiny drain in a row since the war began. Last week’s sizable Crude build was enbough to offset the drain and create only the second weekly build in total crude stocks since early April…
…as the caves hit ‘tank’ bottoms..
The dip in US distillates stocks leaves it 15% below seasonal averages (and a record low for this time of year)…
Crude production edged lower to 13.94 million barrels a day last week, down by 5,000 barrels a day from the previous week. The small drop came even as the number of rigs drilling rose for a third straight week, with another two units put into operation, according to Baker Hughes.
The 4-week moving average for US gasoline demand slipped by 49,000 per day for the EIA week, but remains within seasonal norms…
WTI was trading around $92 ahead of the official data and is maintaining those highs since…
Bank of America raised its Brent forecast for the second half of the year to $95 a barrel from $83, citing the large disruption to crude and refined-product supplies.
Continued skirmishes through year-end are now its most likely scenario, while alternative routes and escorted shipments through the Strait of Hormuz have mitigated some of the shortfall, Francisco Blanch of BofA Global Research said.
Damaged infrastructure and geopolitical tensions make a rapid normalization unlikely, he added.
Tyler Durden
Wed, 09/23/2026 – 10:50
