Oil Falls Below $97 as Gulf Supplies Return – THIS UPDATE

Oil prices, which had risen to $103 a few days ago following US President Donald Trump’s kick against Iran’s peace proposal, fell below $97 a barrel on Thursday, October 1, as the resumption of shipments from the Gulf eased supply concerns after a strong rally in September.

Brent crude futures fell 1.1% to $96.92, while US West Texas Intermediate fell 1.4% to $89.18 at 5.20am Nigeria time. Both were intraday data, according to Reuters.

For Nigeria, a prolonged decline would work in two directions. Refineries could face lower crude purchasing costs, creating space for cheaper fuel.

Oil exporters would receive less per barrel, assuming other pricing conditions remain unchanged.

Thursday’s move alone does not prove that Nigerian petrol prices have fallen.

Saudi Arabia resumed loading oil tankers at the Red Sea port of Yanbu on September 29 after restarting the east-west gas pipeline, Reuters reported.

Goldman Sachs estimated that Gulf oil exports recovered to 23.3 million barrels per day from the previous week, around the 2025 average.

Its estimate includes shipments by vessels operating with tracking transponders turned off, making it an assessment of flows rather than a full count of publicly visible cargoes.

US inventory data added evidence of increased crude availability. The September 25 Energy Information Administration chart showed commercial crude inventories at 427.3 million barrels, up from 426.4 million the previous week.

Finite fuel stocks have moved in the opposite direction. Gasoline inventories fell to 204.4 million barrels from 206 million, while distillates, which include diesel, fell to 105.2 million from 107.4 million. More crude oil stored therefore did not mean that more petrol and diesel were immediately available.

Crude oil is the feedstock for gasoline, but it accounts for only a portion of the retail bill. Refining, distribution and marketing also contribute to the price paid by motorists, as the EIA’s explanation of the price of fuel states.

For Nigerian shoppers, exchange rates affect how a cost denominated in dollars translates into naira. A weaker naira could absorb some of the benefits of cheaper crude.

Even fuel already purchased at higher prices means that the morning drop on international markets does not necessarily lead to an immediate reduction in petrol stations.

The latest decline follows a September gain of around 14% for Brent, so it has only begun to reverse the previous month’s rise.

The next test of relief for Nigerian motorists would be reductions in selling prices at refineries or depots, followed by reductions at the pump.