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Crude Oil Prices Soar 20% As Attack On Saudi Facility Disrupts Supplies

16 Sep 2019 9:48 am
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MUMBAI (Commoditiescontrol) - Global oil prices surged the most on record after a strike on a Saudi Arabian oil facility removed about 5 percent of global supplies, an attack the US has blamed on Iran.

In an extraordinary start to trading, Brent futures jumped almost USD 12 a barrel in the seconds after the open on Monday, the biggest intraday advance in dollar terms since they were launched in 1988. On the New York Mercantile Exchange, West Texas Intermediate contracts were frozen for about two minutes after the scale of the move delayed the market open.

While Brent futures pulled back after their initial surge of almost 20 percent, taking the global benchmark just shy of USD 72 a barrel, they were still headed for the biggest percentage gain since 2008.

State energy producer Saudi Aramco lost about 5.7 million barrels per day of output on Saturday after 10 unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s second-biggest oil field in Khurais.

For oil markets, it’s the single worst sudden disruption ever, surpassing the loss of Kuwaiti and Iraqi petroleum supply in August 1990, when Saddam Hussein invaded his neighbor. It also exceeds the loss of Iranian oil output in 1979 during the Islamic Revolution, according to the International Energy Agency.

Brent jumped more than 19 percent on ICE Futures Europe to USD 71.95 a barrel, its biggest gain in percentage terms since 1991. In the following hours, it pared that advance to trade 12 percent higher at USD 67.20 a barrel.

Trading in WTI was frozen for a few minutes because of a so-called circuit breaker, which is triggered by a gain of more than 7 percent. When they finally opened, futures jumped as much as 15.5 percent to USD 63.34, the most since 2008.

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