Oil prices spike after attack on Saudi facility

Tuesday, 17 Sep, 2019

"There is reason to believe that we know the culprit, are locked and loaded depending on verification", Trump said on Twitter on Sunday without mentioning Iran or specifying what the response would entail.

But Americans are more insulated from dramatic swings because technological advances have increased domestic oil output and heightened efficiency, from automobile mileage to home heating.

The attack is now roiling markets with oil prices surging upward ahead of the open Monday.

"If higher oil prices are here to stay, Asia's oil reliant economies such as China, Japan, India, South Korea and the Philippines will start to feel the pain as higher energy and raw material prices add on the cost burden", Yang added.

The company describes the site as "the largest crude oil stabilization plant in the world".

In tweets, the president said the amount of oil released would be determined "sufficient to keep the markets well-supplied".

Brent crude futures settled at $69.02 (55.55 pounds) a barrel, up $8.80, or 14.6%, its largest on-day gain since at least 1988.

Gold rose after the attack on oil facilities in Saudi Arabia inflamed worries over the stability of the Middle East, boosting demand for assets seen as a haven from risk.

U.S. Treasury yields slipped, with benchmark 10-year notes up 15/32 in price to yield 1.845%.

The officials reportedly did not explicitly rule out whether the drones could have still be launched from Yemen, but took a less direct path.

Satellite images released by the United States and examined by the Associated Press show around 17 "points of impact" at an oil processing facility in Abqaiq.

Additional devices that missed their targets were recovered northwest of the facilities and are being jointly analyzed by Saudi and US intelligence, The Associated Press reported.

The officials are speaking on the condition of anonymity to discuss intelligence matters.

The images appear to show black char marks in the heart of Saudi Aramco's Abqaiq oil processing facility in Buqyaq.

NORTHAM: It could. You know, Saudi Arabia is a giant oil exporter.

Separately, KUNA said authorities would investigate reports of drones flying over Kuwait.

While Saudi Arabia has spent billions of dollars on military hardware, recent events have underscored the vulnerability of its infrastructure to attack.

US oil prices have been trading in a belt between $50 and $60 a barrel in the past six months. Supplies have been mostly in balance this year, as US production has made up for declines in Venezuela and Iran.

The European Union warned that the strikes posed a real threat to regional security, Britain called them a "reckless attempt" to disrupt global oil supplies and France said such actions could only worsen the "risk of conflict".

Pompeo tweeted Saturday that there is "no evidence the attacks came from Yemen" and accused Iran of being behind "an unprecedented attack on the world's energy supply". And in a world already concerned about supply, the impact of another attack could mean a sharp effect on prices, said Kevin Book, managing director of Clearview Energy Partners.

Half of Saudi Arabia's oil output has been affected adversely by the strikes.

The same official said the damage was caused by an armed drone attack.

Among major currencies, the Saudi news pushed the yen up 0.3% to 107.74 per dollar while the Canadian dollar rose 0.5% in anticipation of higher oil prices.

The US accusations triggered angry retorts from Iran, which said they were created to act as a pretext for future hostile actions against the Islamic Republic. "Blaming Iran won't end disaster". The Houthi rebels themselves say that Iran is not behind these attacks.

The statement came from Iraqi Prime Minister Adel Abdul-Mahdi's office on Sunday.

It says Iraq would act "decisively" if anyone tried to use its territory to attack other countries.

Iranian foreign ministry spokesman Abbas Mousavi dismissed the remarks as "blind and futile comments".