International oil prices fell sharply this week as geopolitical risks eased.
London Brent crude futures fell 3.7% in the week, the biggest weekly decline since early August. U.S. crude oil futures fell 3.6% in the week, the biggest weekly decline since mid-July.
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The crude oil futures are only slightly higher than the level before Saudi oil facilities were attacked in September 14th. Manish Raj, chief financial officer of Velandera Energy Partners, said the supply-demand balance was having an impact on oil prices as geopolitical concerns gave way to supply and demand realities.
Saudi officials say Saudi oil production has recovered to an average of more than 11 million barrels a day since the attack on the country’s main oil facilities. Raj said Saudi Arabia’s strong commitment to the market and the attack on oil facilities in the middle of this month was a one-off event, which eased market concerns.
Jim Rietbusch, President of Ritter Busch associates, believes that because of the lack of progress in the economic and trade situation and the impeachment survey launched against the US president, investor risk appetite has been reduced. Reverse seasonal increases in U.S. commercial crude oil inventories have increased downward pressure on oil prices.
Tariq Zahir, executive director of dikka capital consultancy, said that if Saudi Arabia’s oil facilities were not attacked, the trading range of oil prices might be lower. If there is no escalation of tension in the Middle East or obstruction of oil supply, the premium in the oil market will gradually disappear. Future demand prospects have become more sluggish.
According to data released by the US oilfield technology service company, the number of active drilling rig in the United States continued to decline during the week, with a decrease of 6 to 713.