|Day's Range||53.25 - 57.09|
The jump in crude prices hurt airline stocks and other businesses with big fuel bills and put upward pressure on inflation expectations.
South Korea said on Monday that it would consider releasing oil from its strategic oil reserves if circumstances around crude oil imports worsen in the wake of Saturday's attack on Saudi Arabia's oil facilities. The comments came as oil prices surged to four-month highs on Monday after weekend attacks on crude facilities in Saudi Arabia sparked supply fears. South Korea's energy ministry said in a statement it anticipated no short-term impact on securing crude oil supplies from Saudi Arabia.
* Indian rupee declines the most * Korean won, Taiwan dollar firms in catch-up mode * Indonesian rupiah set for worst session in over 1 month (Adds text, updates prices) By Shreya Mariam Job Sept 16 (Reuters) - Most Asian currencies weakened against the dollar on Monday, with net oil-importers taking a sharp hit after an attack on Saudi Arabia's oil facilities drove up crude prices and worsened tensions between the United States and Iran. Oil prices soared with Brent crude posting its biggest intra-day percentage gain since the Gulf War in 1991, after an attack on Saudi Aramco's crude processing sites on Saturday shut about 5% of global supply. "Emerging Asian currencies most at risk to higher oil prices belong to countries with the largest oil trade deficits.
Brent crude surged the most on record after a drone strike on a Saudi Arabian oil facility removed about 5pc of global supplies.
The attack on the Saudi Aramco facility halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia's global daily exports
The strike on the heartland of Saudi Arabia's oil industry, including damage to the world's biggest petroleum-processing facility, has driven oil prices to their highest level in nearly four months. The attack on Saudi oil facilities on Saturday not only knocked out over half of the country's production, it also removed almost all the spare capacity available to compensate for any major disruption in oil supplies worldwide.
India, the world’s third-largest oil importer, has a reason to worry as escalating geopolitical tensions in West Asia have raised the spectre of higher oil prices. On Sept. 14, 10 drones targeted Saudi Arabia’s Abqaiq oil refinery and Khurais oil field, belonging to the state-owned Aramco. At the sites, which account for over 5% of global oil supply, the attacks sparked massive fires that were visible from outer space.
U.S. President Donald Trump said on Sunday the United States was "locked and loaded" for a potential response to the attack on Saudi Arabia's oil facilities, after a senior U.S. administration official said Iran was to blame. Trump also authorized the use of the U.S. emergency oil stockpile to ensure stable supplies after the attack, which shut 5% of world production and sent crude prices soaring more than 19% in early trade on Monday, before moderating to show a 10% gain.
SINGAPORE/SEOUL (Reuters) - Oil prices soared on Monday, with Brent crude posting its biggest intra-day percentage gain since the Gulf War in 1991, after an attack on Saudi Arabian oil facilities on Saturday shut about 5% of global supply. Brent crude futures, the international benchmark, rose by as much as 19.5% to $71.95 per barrel, the biggest intra-day jump since Jan. 14, 1991. Saudi Arabia is the world's biggest oil exporter and the attack on state-owned producer Saudi Aramco's crude processing facilities at Abqaiq and Khurais has cut output by 5.7 million barrels per day.
Oil surged to four-month highs on Monday after weekend attacks on crude facilities in Saudi Arabia sparked supply fears, while shares in Asia extended losses as bleak economic data from China sapped investors' risk appetite. Crude futures on both sides of the Atlantic hit their highest since May, but came off their peaks after U.S. President Donald Trump authorised the use of the country's emergency stockpile to ensure stable supply. Trump also said the United States was "locked and loaded" for a potential response to the strikes on the Saudi facilities, which shut 5% of world production, after a senior official in his administration said Iran was to blame.
Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world's top producer by half, fuelling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country. "One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton's sacking... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid," said Ray Attrill at National Australia Bank.
Oil prices surged more than 10 percent Monday after attacks on two Saudi Arabian plants that slashed output in the world's top producer by half, with Donald Trump blaming Iran and raising the possibility of a military strike on the country. West Texas Intermediate jumped 10.68 percent to $60.71 and Brent climbed 11.77 percent to $67.31 in early Asia trading following the blasts at facilities run by state-owned giant Aramco. Tehran denies the accusations but the news has revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
(Bloomberg) -- The record surge in Brent crude futures on Monday only tells part of the story of how the oil market is reacting to a strike on a Saudi Arabian oil facility that’s removed about 5% of global supplies. Here are five charts that shed more light on the granular impact.Historical PerspectiveBrent futures soared as much as $11.73 a barrel in intraday trading, the biggest increase since the contract launched in 1988. The global benchmark surged as much as 19.48% in percentage terms, the biggest jump since the first Gulf War in 1991.Scale of DisruptionThe estimated 5.7 million barrels a day of lost Saudi production is the single biggest sudden disruption on record. It surpasses the loss of Kuwaiti and Iraqi supply during the Gulf War in August 1990, and the hit to Iranian output in 1979 from the Islamic Revolution, according to the International Energy Agency.Timing is EverythingBecause the loss of oil is sudden, the impact is being felt more heavily in contracts for near-term delivery than further down the curve. The price gap between Brent for delivery this November and December 2020 doubled from $3.57 a barrel at the close of trading Friday to more than $7 on Monday.Protection MoneyThe options market shows traders are still nervous that prices will risen even further, and are now paying up to protect against it. Calls on West Texas Intermediate crude futures are pricier than puts for the first time since 2018.Location, Location, LocationGlobal oil prices are feeling the impact of the attack more intensely than those in the U.S., where the benchmark is slightly buffered by being delivered to a land-locked oil hub in Oklahoma. Brent’s premium to West Texas Intermediate widened as much as 37% to $7.40 a barrel, the biggest gap since July.\--With assistance from Javier Blas and David Marino.To contact the reporters on this story: Dan Murtaugh in Singapore at firstname.lastname@example.org;Alfred Cang in Singapore at email@example.comTo contact the editors responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.org, Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
U.S. shale producers have added millions of barrels to global crude supply in recent years, but that does not mean they can quickly replace barrels lost from weekend attacks on Saudi Aramco facilities, energy experts said on Sunday. Shale producers this year have been cutting budgets and workers and trimming production goals after years of heavy spending. Producers will see increased demand, especially from Asian buyers.
News of the attacks has experts and analysts warning that a long-term decrease in the world's crude oil supply has implications at the pump.
Prices could move higher still if Saudi output is curtailed for a more substantial period, the note's author Chris Midgley, global head of analytics at S&P Global Platts, wrote. An industry source briefed on the developments told Reuters on Sunday that Saudi Arabia's oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities. Platts said, however, that "any evidence of prolonged disruption of production would heavily impact OPEC spare capacity and the ability of the IEA to use Strategic Petroleum Reserves to shore up the market".
Following drone strikes on Saudi Arabian oil facilities -- and fears of lowered production and increased crude price -- President Donald Trump said he would authorized the release of oil from the Strategic Petroleum Reserve and allow for the expedited "approval" of oil pipelines in Texas and various other states. The hits on two Saudi Aramco plants -- including on the largest petroleum processing facility in the world -- are expected to lower output dramatically of crude and gas for the oil-producing nation. "Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount," wrote President Trump over Twitter Sunday evening, "sufficient to keep the markets well-supplied.
(Bloomberg) -- The latest and most destructive attacks on Saudi oil facilities provide stark evidence of the vulnerability of global crude supply in an age of disruptive technologies that can bring a century-old industry to its knees -- at least temporarily.From remote-controlled drones to anti-ship mines and computer worms, hostile parties have employed an unpredictable array of asymmetric weaponry to confound one of the best-equipped militaries in the Middle East. Saudi Arabia blames many of the attacks against its oil assets on Houthi rebels in impoverished Yemen, where Saudi forces have been fighting since 2015 in a civil war that’s spilling across their shared border.The use of drones shows that “an air force or even particularly advanced rockets are not necessary to cause widespread economic damage to the kingdom’s center of gravity,” said Milena Rodban, an independent risk consultant based in Washington, D.C. The Saudis accuse Iran of backing the Houthis and supplying them with weapons.The attacks mark at least the sixth time in four months that Saudi energy facilities or tankers carrying the kingdom’s oil have been targeted. Mine attacks against ships near the Strait of Hormuz and drone strikes on Saudi pipelines in May and June served as warnings of the vulnerability of supplies, even if they didn’t cause significant cuts in shipments. The weekend attack, by contrast, forced an immediate halt in 5.7 million barrels of daily production.Cyber attacks, another element of asymmetric warfare, pose a similar risk. Saudi Arabia blamed unidentified people based outside the country for sending a virus that compromised state-run oil producer Saudi Aramco’s computer network in August 2012. Although the virus had no effect on output of crude and refined products, the incident highlighted Aramco’s vulnerability to cyber strikes.The Houthis have previously targeted Saudi pipelines and refineries, in forays over the past year. In other strikes against Aramco facilities, guards repulsed a 2006 al-Qaeda attack on Abqaiq, and bombings at residential towers near Aramco’s headquarters in Dhahran on the country’s eastern coast caused deaths and damage.Yemen’s Houthis claimed responsibility for Saturday’s attack. The rebels said they launched drones, and the Saudi Press Association reported that drones were involved. Saudi Aramco said “projectiles” hit its facilities.Although U.S. Secretary of State Mike Pompeo directly blamed Iran for the attacks, Iran’s Foreign Ministry spokesman Abbas Mousavi denied the accusation.“Saudi Arabia’s oil infrastructure is an attractive target to more than just the Houthis,” Rodban said. “Anyone hoping to sway oil markets, spook investors, and highlight glaring weaknesses in defenses can take advantage of cheap and easy-to-deploy drones.”(Adds details of asymmetric threats in second paragraph.)\--With assistance from Manus Cranny and Alaa Shahine.To contact the reporters on this story: Anthony DiPaola in Dubai at email@example.com;Verity Ratcliffe in Dubai at firstname.lastname@example.orgTo contact the editors responsible for this story: Nayla Razzouk at email@example.com, Bruce Stanley, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Saudi energy giant Aramco is battling to reassure markets after devastating attacks on two oil plants, where a prolonged shutdown risks roiling investor confidence ahead of the state-owned giant's mega stock listing, analysts say. A wave of drones struck Abqaiq –- the world's largest oil processing facility –- and the Khurais oil field in eastern Saudi Arabia, knocking out nearly half of the kingdom's crude production and exposing the vulnerability of its energy infrastructure. It is a major test for the kingdom's newly appointed energy minister Prince Abdulaziz bin Salman –- a half-brother to the crown prince –- as the attacks could dampen investor confidence in Aramco's upcoming two-stage stock market debut.
(Bloomberg Opinion) -- The chances of President Donald Trump easing sanctions on Iran’s oil exports have dropped to zero after an attack on Saudi Arabia’s oil industry that his Secretary of State Mike Pompeo has pinned on Tehran. The bigger challenge now will be reining in the U.S. hawks calling for retaliatory strikes on Iran’s energy industry facilities.Before this weekend the big political news dominating the oil market was the sudden departure of John Bolton as Trump’s hardline national security adviser. His leaving raised hopes (or fears, depending on your point of view) that waivers from sanctions might be reinstated for some buyers of Iranian crude; there was talk even of Trump meeting with Iran’s President Hassan Rouhani later this month.I’m deeply skeptical about whether such a diplomatic breakthrough would have taken place without Trump reopening Barack Obama’s nuclear deal with Iran, which the current president scrapped last year. I can’t believe Trump would have been willing to do that. The drone strike on Saudi Arabia’s Abqaiq oil processing facility in the early hours of Saturday morning makes such speculation irrelevant anyway.Pompeo appears to have taken on Bolton’s mantle of White House ultra-hawk. He blamed Iran for the attack in a Saturday tweet, even though responsibility has been claimed by the Houthi rebels being bombed savagely by a Saudi-led coalition in neighboring Yemen. They have plenty of incentive to retaliate.The secretary of state went further than linking Tehran to the attack through its training and support of the Houthis, who are part of a network of militant groups in the Middle East allied with Iran. “There is no evidence the attacks came from Yemen,” Pompeo said in his tweet. He’s yet to share any evidence that it came from Iran either.It would be better if he did. Memories of the “evidence” of Saddam Hussein’s non-existent weapons of mass destruction that precipitated the 2003 invasion of Iraq still linger. It’s a big step to say the attacks came from Iran. An earlier strike against Saudi Arabia’s East-West pipeline was deemed eventually to have been launched by Houthis operating from the sparsely-populated territory of south-western Iraq, although Iraq has denied that its territory was used for the new attack.Saudi Arabia started its devastating bombing campaign in Yemen in 2015 – with some U.S. backing and weaponry – after the Houthis took control of the capital and other parts of the country. Despite thousands of civilian deaths, terrible human rights abuses on both sides and a humanitarian catastrophe, the war has settled into an ugly stalemate. Saturday’s attack, along with previous drone strikes, shows the Houthis’ effectiveness in inflicting damage well beyond Yemen (if indeed it was them).Not surprisingly, Iran’s foreign ministry has denied responsibility. It now needs to go further and try to rein in its clients in Yemen. For its part, the U.S. should do the same in Saudi Arabia. Failure to do so will only lead to more attacks on the region’s oil infrastructure and more costly disruptions to supply.The Saudis will need weeks to restore full production capacity, according to my Bloomberg News colleagues Anthony DiPaola and Javier Blas. Other members of the OPEC+ group, who have been restricting output to boost oil prices since the start of 2017, will open their taps. But more than 85% of the OPEC production cut since January has come from Saudi Arabia itself. The available spare capacity is a lot less than it might appear at first sight.Riyadh was no doubt fearful that any rapprochement between Trump and Rouhani would have led to millions of barrels of Iranian oil gushing back onto the market, thereby scuppering the Saudi effort to support the crude price. The Abqaiq attack, and Pompeo’s response, shows there is no chance of that now. But the vulnerability of Aramco’s own installation to such strikes has created an infinitely worse problem.To contact the author of this story: Julian Lee at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.