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Oil price tumbles as Saudi recovers from drone attack - business live | Oil price tumbles as Saudi recovers from drone attack - business live |
(about 1 hour later) | |
Finally, Britain’s blue-chip FTSE 100 index has ended the day where it started, down just 1 point at 7,320. | |
Relief at the falling oil price lifted some stocks, but this was countered by a rising pound (which pulls down multinationals’ overseas earnings). | |
Investors were also cautious ahead of Wednesday’s US interest rate decision. | |
How high could the oil price go, if full-blown conflict breaks out? | |
Simona Gambarini of Capital Economics think they could more than double from today’s levels. In a worst-case scenario. | |
She told clients: | |
We continue to think that US-China trade tensions and the outlook for Fed policy remain more important drivers of oil prices. | |
Nonetheless, we would not rule out entirely the possibility of an escalation in tensions, leading to an outright conflict in the Middle East. In that case, we would not be surprised to see oil prices reach, and perhaps even rise above, $150 per barrel by end-2019. | |
Intriguingly, the top Saudi source who spoke to Reuters also said Saudi Aramco had recovered “very fast” from the crisis, which highlights the “real value” of the company. | Intriguingly, the top Saudi source who spoke to Reuters also said Saudi Aramco had recovered “very fast” from the crisis, which highlights the “real value” of the company. |
That could, perhaps, show that Riyadh is keen to shore up confidence in Aramco, and not allow its upcoming stock market flotation to be ruined by the attacks. | That could, perhaps, show that Riyadh is keen to shore up confidence in Aramco, and not allow its upcoming stock market flotation to be ruined by the attacks. |
“The Hard Break on oil was caused by an official known as a ‘top Saudi Source’ that said that Saudi Arabia is close to restoring 70% of the 5.7 million barrels lost due to attack.” @EnergyPhilFlynn | “The Hard Break on oil was caused by an official known as a ‘top Saudi Source’ that said that Saudi Arabia is close to restoring 70% of the 5.7 million barrels lost due to attack.” @EnergyPhilFlynn |
“...Saudi Arabian oil output will back on line in 2 to 3 weeks. The Official did not address how this might not happen again. The Source also seemed to be touting the Saudi Aramco IPO by saying the recovery shows the real value of the company” @EnergyPhilFlynn | “...Saudi Arabian oil output will back on line in 2 to 3 weeks. The Official did not address how this might not happen again. The Source also seemed to be touting the Saudi Aramco IPO by saying the recovery shows the real value of the company” @EnergyPhilFlynn |
Despite this sudden reversal, oil is still up around 7% compared with Friday night, before a swarm of drones attacked the Abqaiq oil facility. | Despite this sudden reversal, oil is still up around 7% compared with Friday night, before a swarm of drones attacked the Abqaiq oil facility. |
That suggests oil is now seen as a riskier asset, with a greater risk of military conflict in the Gulf region. | That suggests oil is now seen as a riskier asset, with a greater risk of military conflict in the Gulf region. |
And no wonder, with US senator Lindsey Graham yesterday suggesting an attack on Iran’s oil refineries to “break the regime’s back”: | And no wonder, with US senator Lindsey Graham yesterday suggesting an attack on Iran’s oil refineries to “break the regime’s back”: |
Sen. Lindsey Graham on possible response to attack on Saudi oil facilities: "The target list I would put … would be the Iranian oil refineries. Nobody is talking about invading Iran, but we want to make them pay a price for trying to disrupt world order” pic.twitter.com/uVmff7fWFG | Sen. Lindsey Graham on possible response to attack on Saudi oil facilities: "The target list I would put … would be the Iranian oil refineries. Nobody is talking about invading Iran, but we want to make them pay a price for trying to disrupt world order” pic.twitter.com/uVmff7fWFG |
Oil drops 6% on report Saudi oil output will return to normal faster than initially anticipated#Oil #CrudeOil #Crude #barrels #brent #nymex #USOil #SaudiArabia #SaudiAramco #saudiattack pic.twitter.com/CWbw4qO1rq | Oil drops 6% on report Saudi oil output will return to normal faster than initially anticipated#Oil #CrudeOil #Crude #barrels #brent #nymex #USOil #SaudiArabia #SaudiAramco #saudiattack pic.twitter.com/CWbw4qO1rq |
Here’s the Reuters news story that send oil prices tumbling a few minutes ago: | Here’s the Reuters news story that send oil prices tumbling a few minutes ago: |
Saudi Arabia’s oil output will be fully back online quicker than initially thought following weekend attacks on production facilities, two sources briefed on the latest developments told Reuters on Tuesday. | Saudi Arabia’s oil output will be fully back online quicker than initially thought following weekend attacks on production facilities, two sources briefed on the latest developments told Reuters on Tuesday. |
The Kingdom is close to restoring 70% of the 5.7 million barrels per day (bpd) production lost following the attacks, one of the sources, a top Saudi source briefed on the latest developments, said. | The Kingdom is close to restoring 70% of the 5.7 million barrels per day (bpd) production lost following the attacks, one of the sources, a top Saudi source briefed on the latest developments, said. |
That source said output will be fully back online in the next 2-3 weeks. | That source said output will be fully back online in the next 2-3 weeks. |
EXCLUSIVE-#Saudi oil output to return faster than first thought-sources https://t.co/YXTKADjaZh @dmitryZ_reuters | EXCLUSIVE-#Saudi oil output to return faster than first thought-sources https://t.co/YXTKADjaZh @dmitryZ_reuters |
Here’s a chart showing how the price of a barrel of Brent crude has suddenly tumbled, having posted its biggest ever percentage gain on Monday. | Here’s a chart showing how the price of a barrel of Brent crude has suddenly tumbled, having posted its biggest ever percentage gain on Monday. |
Here’s some instant reaction to the news that the disruption to Saudi oil production could be less than feared. | Here’s some instant reaction to the news that the disruption to Saudi oil production could be less than feared. |
Saudi oil output to return much quicker than expected - oil prices tank Energy update:Oil - US Crude 5995 -4.32%Oil - Brent Crude 6526 -4.42%#Oil #OOTT #Brent #WTI | Saudi oil output to return much quicker than expected - oil prices tank Energy update:Oil - US Crude 5995 -4.32%Oil - Brent Crude 6526 -4.42%#Oil #OOTT #Brent #WTI |
Oil drops 5% on report Saudi oil output will return to normal faster than initially anticipated: @CNBC pic.twitter.com/qFH0hKxIJM | Oil drops 5% on report Saudi oil output will return to normal faster than initially anticipated: @CNBC pic.twitter.com/qFH0hKxIJM |
NEWSFLASH: The oil price is suddenly plunging. | NEWSFLASH: The oil price is suddenly plunging. |
Brent crude has slumped by more than four dollars per barrel, dropping back to just $64.77 -- having hit $69/barrel earlier this morning. | Brent crude has slumped by more than four dollars per barrel, dropping back to just $64.77 -- having hit $69/barrel earlier this morning. |
That’s a huge move -- down around 6% today (almost half of Monday’s incredible surge). | That’s a huge move -- down around 6% today (almost half of Monday’s incredible surge). |
US crude is also plunging, down almost $3 per barrel to $60.16. | US crude is also plunging, down almost $3 per barrel to $60.16. |
The sudden selloff been triggered by a Reuters report that Saudi Arabia will repair the damage from Saturday’s attack on its major production facilities sooner than expected. | The sudden selloff been triggered by a Reuters report that Saudi Arabia will repair the damage from Saturday’s attack on its major production facilities sooner than expected. |
Source have told Reuters that | Source have told Reuters that |
Output will return to normal levels sooner than thought | Output will return to normal levels sooner than thought |
Output will be “fully back online” in the next two to three weeks | Output will be “fully back online” in the next two to three weeks |
Saudi is close to restoring 70% of the 5.7m barrels per day lost | Saudi is close to restoring 70% of the 5.7m barrels per day lost |
Impact on oil exports has been minimal, thanks to Saudi’s Aramco’s oil storage | Impact on oil exports has been minimal, thanks to Saudi’s Aramco’s oil storage |
More to follow! | More to follow! |
Crude & brent oil plunge after Reuters, citing a source, reports that Saudi oil output will be fully back online in the next 2-3 weekshttps://t.co/qT4SPEEuYR pic.twitter.com/mLzbLYHf3v | Crude & brent oil plunge after Reuters, citing a source, reports that Saudi oil output will be fully back online in the next 2-3 weekshttps://t.co/qT4SPEEuYR pic.twitter.com/mLzbLYHf3v |
The New York stock exchange has dipped into the red at the start of trading, adding to yesterday’s declines. | The New York stock exchange has dipped into the red at the start of trading, adding to yesterday’s declines. |
The Dow Jones industrial average is down 89 points or 0.33%, as worries about the Middle East mount. | The Dow Jones industrial average is down 89 points or 0.33%, as worries about the Middle East mount. |
U.S. stocks open lower https://t.co/sPi2Ofe7U5 pic.twitter.com/BI2iASKaIY | U.S. stocks open lower https://t.co/sPi2Ofe7U5 pic.twitter.com/BI2iASKaIY |
Here’s a video clip of Iran’s supreme leader, Ayatollah Ali Khamenei, speaking today: | Here’s a video clip of Iran’s supreme leader, Ayatollah Ali Khamenei, speaking today: |