Sun, Sep 22, 2019 - Page 14 News List

Oil posts biggest weekly gain in eight months following Saudi Arabia attack


Oil on Friday edged lower, but still posted the biggest weekly gain in months, days after an attack on a key Saudi Arabian facility roiled markets.

Brent rose 6.7 percent this week, the largest weekly gain since January, while West Texas Intermediate registered its biggest weekly rise since June.

The weekly increases held even after both benchmarks fell in late trading on Friday as investors grew more confident of Saudi Arabia’s ability to restore production to pre-attack levels.

“Gains this week are dependent on promises that the Saudis have made,” said Gene McGillian, a senior analyst and broker at Tradition Energy in Connecticut.

“There is a little more faith that the Saudis will do what they have said,” McGillian added.

Earlier, Brent rose as much as 1.3 percent while West Texas Intermediate increased 1.7 percent after US President Donald Trump tightened the screws on Iran by sanctioning the Central Bank of Iran in retaliation for the attack that crippled Saudi Arabian oil production.

Saudi Arabia, which has blamed Iran as the source of weapons used in the Sept. 14 aerial attacks, is depleting stockpiles to meet export commitments and operating without its usual buffer of spare capacity, increasing risks for the market should there be other emergencies.

While state-oil company Saudi Arabian Oil Co is optimistic about meeting its post-attack targets for restoring supply, there are skeptics, including Rystad Energy AS and FGE.

Earlier on Friday, Saudi Arabian Oil Co hosted a media tour that showed equipment at the Khurais field and Abqaiq processing plant that were badly damaged from the drone attacks.

That the kingdom is resorting to obtaining supplies from other sources has also fanned concerns about the length of the disruption.

Brent crude for November settled down US$0.12 to US$64.28 per barrel on the ICE Futures Europe Exchange.

Options traders have become the most bullish on Brent in eight years, with the price of one-month benchmark calls relative to puts at the highest since 2011.

West Texas Intermediate for delivery next month, which expired on Friday, fell US$0.04 to US$58.09 per barrel on the New York Mercantile Exchange.

The November contract declined US$0.10 to US$58.09. Brent crude was at a US$6.19 premium to the same-month US marker.

In the US, investors will be monitoring the aftermath of a tropical storm that inundated large swaths of south Texas and affected oil facilities from refineries to pipelines.

The shutdown of refineries and oil terminals is likely to reduce domestic oil demand and curtail exports of crude oil.

In other energy trading, wholesale gasoline fell US$0.02 to US$1.68 per gallon and heating oil declined US$0.01 to US$1.99 per gallon, while natural gas fell US$0.01 to US$2.53 per 1,000 cubic feet.

Gold rose US$8.90 to US$1,507.30 per ounce and silver fell US$0.03 to US$17.74 per ounce, while copper was unchanged at US$2.59 per pound.

Additional reporting by AP

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