Why Oil Prices Just Fell 6%

Catogory : Market Report

Oil prices fell sharply Saudi Arabia’s oil output may return to normal more quickly than earlier reports had suggested. Oil production is expected to return to normal within two to three weeks, contrary more pessimistic view of how long it would take for Aramco’s production to come back online.

WTI had sank $3.83 per barrel (-6.09%) to reach $59.07. The price is still high compared to the $55/$56 levels that we’ve seen in recent weeks. Brent crude is also trading sharply down, losing $4.19 per barrel (6.19%) on the day, reaching $63.49 per barrel. Brent is still trading up week over week. Saudi Arabia is now thought to be close to bringing back online 70% of the 5.7 million barrels per day that were brought offline after an attack on The Kingdom’s oil infrastructure, Source Said. The rest, the source said, would come back online within two to three weeks.

Yesterday, sources reported that it could take months to fully restore Saudi Arabia’s oil output. The news of the attacks that took Saudi production offline sent oil prices soaring to a 20% increase, doing what OPEC and its allies have been trying to do for over a year—bring down oil inventories to lift prices. The Abqaiq facility and the Khurais oil field in Saudi Arabia were hit by attacks, which resulted in the suspension of more than half of Saudi Arabia’s oil production. The onshore Khurais oil field has the capacity to produce 1.2 million bpd of Arab Light.