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MoneyOil could rise $10 per barrel after drone attack reportedly forces Saudi to cut output in half

08:05  15 september  2019
08:05  15 september  2019 Source:   cnbc.com

Why the Saudi oil attack is a ‘big deal’ that could be a ‘game changer’ in stock markets and crude prices

Why the Saudi oil attack is a ‘big deal’ that could be a ‘game changer’ in stock markets and crude prices An intensifying Middle East conflict is threatening to throw the world’s energy market into disarray after a weekend drone attack destroyed parts of Saudi Aramco’s Abqaiq plant — one of the world’s largest processors of oil.

Oil prices could jump as much as $ 10 per barrel after a number of drone strikes hit the center of Saudi Arabia's oil industry, forcing the kingdom to cut its oil output in half . Ten drones attacked an oil processing facility at Abqaiq and the nearby Khurais oil field on Saturday, causing a loss of

Saudi Oil Output Cut in Half After Drones Strike Aramco Site. About 5.7 million barrels per day of output has been suspended, Saudi Aramco said in a statement. Attack on Saudi Oil Plant Is What Everyone Feared: Oil Strategy. Aramco is working to compensate clients for some of the shortfall from

Oil could rise $10 per barrel after drone attack reportedly forces Saudi to cut output in half© Provided by CNBC LLC A trader wipes his eyes as he watches stock prices at the New York Stock Exchange in New York.

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Oil prices could jump as much as $10 per barrel after a number of drone strikes hit the center of Saudi Arabia's oil industry, reportedly forcing the kingdom to cut its oil output in half.

Ten drones attacked an oil processing facility at Abqaiq and the nearby Khurais oil field on Saturday, reportedly causing a loss of almost five million barrels of crude production a day or about 5% of the world's daily oil production. Although it's still too early to tell the extent of the damage and how long the facilities will be shut down, oil analysts and traders told CNBC the impact on the commodity's price could be double digit.

Two Major Saudi Oil Installations Hit by Drone Strike, and U.S. Blames Iran

Two Major Saudi Oil Installations Hit by Drone Strike, and U.S. Blames Iran Drone attacks claimed by Yemen’s Houthi rebels struck two key oil installations inside Saudi Arabia on Saturday, damaging facilities that process the vast majority of the country’s crude output and raising the risk of a disruption in world oil supplies. 

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Oil prices soared after a coordinated attack hit the heart of Saudi Arabia's oil industry on Saturday, forcing the kingdom to cut its oil output in half . Abqaiq is the world's largest oil processing facility and crude oil stabilization plant with a processing capacity of more than 7 million barrels per day.

"This is a big deal," said Andrew Lipow, president of Lipow Oil Associates. "Fearing the worst, I expect that the market will open up $5 to $10 per barrel on Sunday evening. This is 12 to 25 cents per gallon for gasoline."

Kevin Book, head of research at Clearview Energy, said the price impact will depend on the repair time which can take weeks to months.

"Our baseline assumptions, which incorporate public assessments of strategic petroleum reserve capacity and OPEC spare capacity, imply a net shortfall of ~1 MM bbl/d, or at least a ~$6/bbl premium to the ~$60 Brent close," Book said in a note. "Exclusive of this supply offset, and assuming a three-week shutdown, our models imply ~$10/bbl of upside."

U.S. West Texas Intermediate (WTI) crude futures settled 0.4% lower at $54.85 on Friday, and Brent crude futures traded 0.2% lower at $60.25 per barrel.

So, this attack on Saudi Arabia's oil — what does it mean to us Regular Canadians?

So, this attack on Saudi Arabia's oil — what does it mean to us Regular Canadians? So, this attack on Saudi Arabia's oil — what does it mean to us Regular Canadians?

Drone attacks claimed by Yemen’s Houthi rebels struck two key oil installations inside Saudi Arabia on Saturday, damaging facilities that process the vast majority of the country’s crude output and raising the risk of a disruption in world oil supplies. The attacks immediately escalated tensions in the

Oil traders and analysts expect prices to jump at least a barrel Monday after a strike on a key facility cut Saudi Arabia’s production by half , pulling some 5 Saudi Aramco lost about 5.7 million barrels per day of output after several unmanned aerial vehicles on Saturday struck the world’s biggest

Yemen's Houthi rebels have claimed responsibility for the attack, one of their largest attacks ever inside the kingdom. The Houthis have been behind a series of attacks on Saudi pipelines, tankers and other infrastructure in the past few years as tensions rise among Iran and the U.S. and partners like Saudi Arabia.

"Assuming damage light, the next big question is where the drones came from," said Bob McNally, president at Rapidan Energy Group. "If Iraq, then oil will go up more than a few dollars. And if Abqaiq kills talks of easing sanctions and the discussion turns to retaliation and escalation, I think oil could easily trade higher by $10 or more."

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