Oil Prices Drop After Attack On Saudi Oil Facility

Saudi Aramco’s Abqaiq and Khurais facilities in Saudi Arabia

West Texas Intermediate (WTI) and Brent crude oil prices on Wednesday continued their descent following the Saudi oil facility attack-induced surge early in the week, as reported by RIGZONE.

“Petroleum markets continue under the influence of the Saudi situation with the markets reacting in a manner not seen in a very long time on Sunday evening and then coming back down to earth yesterday,” said Steve Blair, senior account executive with the RCG Division of Marex Spectron.

Blair noted that prices declined Monday amid reports from Reuters and then the Saudi that output would be restored sooner than expected, that 50 percent of production was already back online and that they would use storage to meet client commitments.

The October WTI lost $1.23 to end the day at $58.11 per barrel. The benchmark traded within a range from $57.67 to $59.43.

“October WTI has almost come back down to the top of the congestion range that the markets broke out of on Sunday evening and on Monday,” said Blair, referencing a daily WTI price chart. “Support seen beginning around the $57.40 level with further supports at $56.05 and $55.10 and the bottom of the congestion range around $53.70. Resistance levels a bit harder to glean with the huge upside move, but the best level seen stands around the $61 level.”

The attack on Saudi Aramco’s Abqaiq and Khurais facilities in Saudi Arabia, has resulted in production suspension of 5.7 million barrels of crude oil per day or about 5% of the world’s crude output. The drone attacks have crippled Saudi Arabia’s oil facilities and its immediate fallout was seen in the form of a global surge in crude oil prices. Saudi Arabia is the world’s leading oil exporter.

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