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Oil Dives as Saudis Output to Rebound Strongly From Attacks

CommoditiesSep 17, 2019 03:49PM ET
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Investing.com - Crude prices tumbled on Tuesday after top exporter Saudi Arabia said it will have more output capacity by end of this month than before the attacks at the weekend that briefly knocked out half of its production.

U.S. West Texas Intermediate crude settled down $3.56, or 5.7%, at $59.34 per barrel, reacting to the first official Saudi update on its production since Saturday’s attacks on the Abqaiq crude processing complex and Khurais oilfield. The attacks cut daily world oil supply by 5%.

U.K. Brent crude settled down $4.47, or 6.5%, at $64.55.

Both WTI and Brent jumped more than 14% each in Monday’s session.

Saudi Prince Abdulaziz bin Salman told a news conference in Riyadh that the kingdom will have the ability to produce 11 million barrels per day by Sept. 30 and 12 million bpd by end November, Bloomberg reported.

Saudi Arabia produced 9.85 million bpd in August. The last time it produced as much as 11 million bpd was nearly a year ago, in November 2018.

The Abqaiq facility, which had 4.9 million bpd of output before the attacks, has also had about 2 million bpd restored, Nasir Ameen, chief executive of national oil company Saudi Aramco said, according to the report. Full production was expected to return by end of September.

Some oil market participants were skeptical of the kingdom’s assessment of its ability to rebound so strongly from the attacks, which Yemen-based Houthi rebels claim to have carried out using drones, while U.S. officials suspected projectiles fired by Iran.

A few were of the opinion that the Saudi government was eager to give its oil industry a quick clean bill of health in order not to disrupt the impending IPO of Aramco.

“The IPO is all-important to the Saudis and they can’t let it sink now,” said John Kilduff, partner at New York energy hedge fund Again Capital. “Also, this attack is a huge embarrassment for them and they need to put up a brave face against the Houthis and the Iranians.”

Oil Dives as Saudis Output to Rebound Strongly From Attacks
 

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Andrew carson
Andrew carson Sep 17, 2019 4:45PM ET
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It's like magic ;0
Me comment
Me comment Sep 17, 2019 4:14PM ET
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The media continues to report "the sky is falling, journalism instead of doing good old fashion news investigation to get the fact straight before publishing reports. Bad as Trump with his immediate boostful tweets like we are locked and loaded, then later saying don't want war wasn't an attack on US. It is no wonder people are turning away from the media as 80% of what they publish is not total factual or correct.
Charles Kao
ckao Sep 17, 2019 4:09PM ET
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Restore to normal production level and get all damage repaired are 2 different things. They can double the output of remaining 50% wells.  Just simple math.
Mark Hayek
Mark Hayek Sep 17, 2019 2:36PM ET
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sounds like a giant smoke screen...  either overblown about the damage.... in order to get IRAN in trouble as a scape goat...  or the fix is overly optimistic.. and they will drag it out 6-10 weeks more...
Hank Williams
Hank Williams Sep 17, 2019 1:21PM ET
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The article was put out by Reuters. it was written to sound like production would be back within weeks. just false reporting all over. Reuters should be investigated. The video on television showed a number of large fires. it's not going to be a quick turn around. there were also a large number of calls that I am sure the street wanted to manipulate and control.
Stacey Beam
Stacey Beam Sep 17, 2019 1:21PM ET
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Exactly. I don't see even repairing enough of anything to boost production in any meaningful way very quickly. Fire can do major damage to pipelines and fixing them aren't a trivial matter.
Kim Fai Lam
Kim Fai Lam Sep 17, 2019 1:15PM ET
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hows that possible to get back to 100% in 2-3 weeks??? my business had a fire and it took 3 months to restore back to 100%
Stacey Beam
Stacey Beam Sep 17, 2019 12:36PM ET
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If that much damage was repaired that quickly, a guy has to wonder if the attack reports were severely overblown. I don't think theres a company out there that could patch and test 14 storage tanks in 3 days. Much less test lines and repair or replace damaged valves and other equipment.
Akani Dust
Akani Dust Sep 17, 2019 12:34PM ET
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“Saudi Energy Minister Abdulaziz bin Salman is scheduled to give his first media briefing on the matter at 1:00 PM ET (17:00 GMT)”....when?
 
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