Oil pares losses after reports Houthis attacked Saudi Aramco refinery

Oil prices pared losses to under 1 percent on Thursday after dropping more than 3 percent earlier. Business Recorder reported that claims of Houthi drone attacks on a Saudi Aramco refinery revived supply worries in an already tight market. According to the Saba news agency, two drones hit the Jazan facility, and a Houthi source linked the strike to alleged breaches of Yemen's airspace and sovereignty. Saudi Arabia had not commented.

In late-morning New York trade, Brent futures were 74 cents lower at USD88.24 a barrel, while US West Texas Intermediate fell 77 cents to USD82.56. Both benchmarks had slid over 3.5 percent earlier, as traders reacted to softer demand expectations and growing American crude inventories. Aramco's website puts the Jazan plant's ultra-low sulfur diesel output capacity at 250,000 barrels per day, and diesel crack spreads hit an all-time high after the reports.

Limiting gains, however, were US Energy Information Administration data showing commercial crude stocks up 17.4 million barrels to 424.4 million in the week to August 7. OPEC cut its 2026 world oil demand growth forecast to 580,000 barrels per day, and the International Energy Agency now expects consumption to contract by 1.6 million bpd this year, compared with its earlier forecast of a 1 million bpd drop. The agency linked the lower usage to higher prices and constrained supply from the American-Israeli war against Iran.