Oil price soar. Here’s what is known so far:
Saudi Arabian facilities were the victim of two attacks on Saturday knocking out more than 5% of global supply. Brent crude jumped 10% to $66.28 a barrel, while West Texas Intermediate rose 8.9% to 59.75 in Asian trading. Prices pulled back slightly after US President Donal Trump agreed to release the US reserves.
What does this imply for traders?
This is a big escalation in terms of scale and reach of these attacks which raises the prospect for an ongoing disruption and raises geopolitical dangers. The next several days are likely to be very volatile since traders are going to witness a mix of aggressive speculative traders looking for a prolonged supply disruption.
Trends for Brent Crude
Brent Crude is likely to be in a momentum-driven market. Once the markets calm down and traders learn more about the timing of the repairs then traders will become more concerned and opportunities are likely to be present. Analysts expect a smaller oil market rally in the short term. A small $2-$3 per barrel premium would emerge if the damage appears to be an issue that can be resolved quickly, and $10 if the damage to the facilities is significant.