Oil prices surged more than 15 percent to their highest level in nearly four months

News24xx.com -  Oil prices surged more than 15 percent to their highest level in nearly four months after an attack on Saudi Arabia's oil facilities that knocked out more than five percent of global oil supply.

Brent crude futures jumped more than 19 percent to a session high of $71.95 a barrel at the market's open. The Bloomberg news agency said it was the biggest rise in prices on record.

US crude futures surged more than 15 percent to a session high of $63.34 a barrel. Both benchmarks rose to their highest levels since May.

Prices were up about 12 percent by 2250 GMT, as gains were capped after US President Donald Trump said he authorised the release of oil from the US Strategic Petroleum Reserve (SPR) if needed in a quantity to be determined because of the attack on Saudi's facilities.

State oil giant Saudi Aramco said the attack cut output by 5.7 million barrels per day, at a time when Aramco is trying to ready itself for what is expected to be the world's largest share sale.

"I think the market is going to be in quite a bit of wait-and-watch mode, and of course, there’s going to be a lot of nervousness, and I expect a lot of volatility in trading as well," Vandana Hari, founder and CEO of energy markets research firm Vanda Insights, told Al Jazeera.

Aramco gave no timeline for output resumption. A source close to the matter told the Reuters news agency the return to full oil capacity could take "weeks, not days."

Saudi Arabia's oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities, an industry source briefed on the developments told Reuters on Sunday.

"The surge in prices is the natural knee-jerk reaction but the path ahead and ability to sustain at elevated levels remains dependent on the duration of the outage, the ability to meet export commitments through domestic drawdowns, demand elasticity at higher prices as well as government and agency policy," said Michael Tran, managing director of energy strategy at RBC Capital Markets in New York.

 

 

 

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