Saudi supply disruption boosts oil
Buyers and traders remain sceptical despite reassurances by Saudi Arabia that it can resume full production by end-September after attack on processing facility
Singapore — Oil prices rose to their highest in two sessions on Monday amid concerns about oil supply disruptions from Saudi Arabia and elevated tensions in Middle East.
Brent crude futures increased to as much as $65.50 a barrel. The front-month contract was at $64.84, up 57 cents, or 0.9% at 4.24am SA time.
US West Texas Intermediate (WTI) crude futures were at $58.61 a barrel, up 52 cents, or 0.9%, after earlier hitting a high of $59.39.
Despite efforts by the world’s top oil exporter Saudi Arabia to reassure global markets that it can resume full production by end-September after an attack on its largest oil-processing facility in mid-September, buyers and traders remained sceptical.
State oil company Saudi Aramco has switched crude grades and pushed back crude and oil products deliveries to customers by days after the attack.
“The fund community faded the attack last week on the assumption that supply would return very quickly, but the reality is likely to be different,” said Energy Aspects analyst Virendra Chauhan.
Tensions in the Middle East have escalated after the attack. The Pentagon has ordered additional troops to be deployed in the Gulf region to strengthen Saudi Arabia’s air and missile defences after the attack on Saudi oil facilities.
US secretary of state Mike Pompeo said on Sunday that the troops are for “deterrence and defence” and Washington aims to avoid war with Iran.
In the US, the effect of Tropical Storm Imelda on refineries in Texas has eased as ExxonMobil and Valero restarted their crude processing units at the weekend.