Crude Oil Market Reacts to Saudi Supply News
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17 September 2019
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Crude Oil Market Reacts to Saudi Supply News
The recent drone attack on Saudi oil facilities caused a dramatic rally in oil prices on Monday, marking one of the fastest price spikes on record. However, optimism regarding a quick recovery in Saudi Arabia’s oil production levels has led to a pullback in prices.
Price Movement Highlights:
- Monday Rally: Oil prices surged following the attack, creating a significant market gap at the week’s open.
- Tuesday Decline: Reuters reported that Saudi oil production levels are expected to normalize within two to three weeks, triggering a sharp slump in oil prices.
- WTI Crude: Fell by 6.9%, trading at $58.60 per barrel.
- Brent Crude: Dropped 7.4%, trading at $63.90 per barrel by 14:00 NY time.
Current Market Status:
WTI Crude trades below $60 per barrel, having dropped 3% from the highs reached on Monday. Traders are now focused on whether the market will close the weekend gap, with Friday’s closing price at $54 per barrel acting as a key level.
Outlook:
The speed of Saudi Arabia’s recovery in oil supply will be critical in determining the market’s next move. A rapid return to normal production levels could push prices lower, while delays or further geopolitical tensions may sustain elevated price levels. Traders should monitor updates on Saudi output and Middle East developments for new trading opportunities.
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