Oil falls 2% Sunday night, WTI near $98, as Saudi crude starts moving again through the Gulf

Oil prices fell about 2% when futures trading reopened Sunday night. Traders are betting that Saudi crude exports keep recovering, and a weekend of attacks in the region has not changed that so far. U.S. benchmark West Texas Intermediate for October delivery dropped 2.18% to $98.11 a barrel and Brent for November fell 2.07% to $101.72, CNBC reported.

Our own market data showed a similar picture at 11:35 p.m. New York time: WTI at about $97.90, down 1.99%, and Brent at about $102.31, down 1.81%. Live prices are on our crude oil chart.

Why oil is falling after a weekend attack

Iran-backed Houthi forces said they hit Saudi Arabia with missiles and drones on Saturday, according to CNBC. Oil did not jump on the news. Traders are watching supply instead, and more Saudi oil is reaching buyers than the market feared earlier in the week.

The main supply worry has been Saudi Arabia's East-West pipeline. Before it was damaged, it carried 4 million to 5 million barrels a day across the kingdom to the Red Sea port of Yanbu, which let that oil avoid the Strait of Hormuz, OilPrice.com reported. Aramco has since sold about 60 million barrels from its Ras Tanura terminal in the Gulf for September and October loading. That puts roughly 1 million to 1.5 million barrels a day back on the market, mostly for buyers in Asia.

JPMorgan analysts wrote in a September 18 note, cited by CNBC, that "Middle East oil flows remain surprisingly strong" despite the pipeline disruption. They put total flows at an average of 17.1 million barrels a day over the prior 10 days. That is still 6.1 million barrels a day below the 2025 average.

Europe is still short

The recovery is uneven. Aramco has told European term customers they will get no Saudi crude in October, according to OilPrice.com, which cited a Bloomberg report. Dated Brent, the price of physical North Sea cargoes, topped $130 last week, well above the futures price. Aramco is aiming to restore about half of the pipeline's capacity within days. OilPrice.com said full capacity is unlikely for about six more weeks.

Brent futures had traded above $108 earlier last week and were around $104.30 on Friday, OilPrice.com said, so Sunday night's drop extends a pullback from the week's high.

What it means for markets and businesses

Oil near $100 has kept inflation pressure high, and that was part of the backdrop when the Federal Reserve raised rates to 3.75%-4% last week. LPL Financial chief economist Jeffrey Roach told CNBC the Fed "has conditioned its inflation outlook on oil markets settling down." Traders who watch rates are watching oil for the same reason.

U.S. stock futures edged up about 0.25% in Sunday evening trading, CNBC reported. That follows a week in which the Dow fell 1.7%, its worst week since March. For fuel-heavy small businesses such as trucking, delivery and construction, a lasting pullback in crude would ease costs. Prices at the pump usually lag moves in futures, so any relief would show up later.

Next up: the flash S&P Global business survey on Wednesday and jobless claims on Thursday. Both are covered in our week ahead for futures traders.

Sources: CNBC, OilPrice.com, Chronicle market data. Prices move quickly in overnight trading. This is market information, not investment advice.