Oil Price Explosion – Test $80 After Attacks In Saudi Arabia: The attacks on the Saudi oil facilities sparked a massive fire at a crude processing plant essential to global oil supplies. The closure impacts 5 million barrels of crude processing per day, affecting 5 percent of the world’s daily oil production. Oil prices could test the US$80 a barrel Brent Crude price, following the attacks on the Abqaiq facility and the Khurais oil field in Saudi Arabia this weekend, S&P Global Platts Analytics said in a note.
“Work is underway to restore production and a progress update will be provided in around 48 hours,” the state-held giant—the world’s largest oil company—said in a statement on Saturday, hours after the attacks.
The now high risk premium and the sudden elimination of spare capacity adds a potential US$5-10 premium to oil prices, S&P Global Platts Analytics said, noting that “prices are likely to break out of the $55-65/b options range, more likely testing the high $70/b previously forecast, if not higher.”
On Monday, at the start of the first trading day since Saturday’s attacks, Brent Crude prices soared 20 percent at opening, surging the most on record. Additional risk premium “could see prices test $80/b despite Saudi Arabia today claiming production and exports will not be significantly impacted,” S&P Global Platts Analytics said on Saturday.
Source: Oil Price