Oil prices slipped for a third straight session as shifting concerns over Middle East supply weighed on the market. While Saudi Arabia has paused some crude sales to Europe, traders and analysts note that supply buffers remain in place for now.

Global benchmark Brent crude settled 0.9% lower near $104 per barrel, capping a modest weekly loss. Saudi Aramco is working to partially restore operations on the East-West pipeline within days and aims to recover full capacity within six weeks. The kingdom is also boosting sales of crude lifted outside the Strait of Hormuz.

Where things stand

Scott Shelton, an energy specialist at TP ICAP Group, said the panic in the physical crude market appears to have subsided as Saudi Arabia partially restores flows via the Yanbu route and finds additional pathways to sell more oil outside the Strait of Hormuz. Near-dated WTI futures settled around $100 per barrel.

However, optimism was tempered after Saudi Aramco notified at least two European refinery clients that no crude allocations would be made to them next month. Concerns over physical supply remain unresolved. With pipeline disruptions shaking the European spot market, crude price differentials from the North Sea to the Mediterranean have surged to record levels.

The oil market saw sharp swings this week. Prices initially jumped following the drone attack on Saudi pipelines before retreating. Brent has climbed roughly 70% so far this year, driven by ongoing conflicts tied to the Middle East and Russia. Tightening refined product markets are also fueling inflation worries, with Goldman Sachs Group forecasting further gains in gasoline prices.

What to watch next

On the diplomatic front, a meeting with Persian Gulf nations is planned on the sidelines of next week's UN General Assembly in New York. Meanwhile, President Trump told Axios he is nearing a "major decision" on whether to escalate strikes against Iran again.

Priyanka Sachdeva, market insights head at Phillip Nova Pte Ltd in Singapore, said sentiment is far from turning bearish, with traders waiting for evidence of supply recovery. She believes the recent price decline looks more like a cooling of geopolitical risk premiums rather than a fundamental reversal.

Data compiled from ICE Futures Europe and the U.S. Commodity Futures Trading Commission show that in the week through September 15, money managers boosted their combined net-long positions in WTI and Brent by 18,254 contracts to 429,413, marking the most bullish stance since late May.

Market close

WTI October futures declined 1.6% to settle at $100.30 per barrel, while Brent November futures fell 0.9% to close at $103.87.