Oil extends declines on Saudi pipeline restart

Saudi Arabia could resume crude exports from the Red Sea port of Yanbu as soon as today, people familiar with the matter said, marking further progress in restoring the kingdom's damaged oil export network. Asian refiners have been told by Saudi Aramco that they will soon be able to pick up crude from Yanbu again, according to reports.

This step comes after the East-West oil pipeline was shut down following drone strikes earlier this month. The pipeline links Saudi Arabia's main eastern oilfields with Yanbu on the Red Sea, providing an export route that bypasses the Strait of Hormuz. The pipeline has a maximum capacity of roughly 7 million barrels per day.

The pipeline outage had posed a serious risk to worldwide oil supply. The resumption of Yanbu exports is significant for the market as it helps alleviate supply concerns. Oil prices have dropped considerably from recent peaks, with traders already factoring in better Saudi export flows and rising optimism about US-Iran diplomatic talks.

There is a relentless stream of negative developments for oil. West Texas Intermediate crude is currently below $90, marking its fifth straight day of declines. The next support level on the technical chart is the lower end of the channel near $85.