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Oil Spikes after Attack on Saudi Oil Facilities

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Last Saturday, an attack on the Saudi Aramco refineries. As a result, Brent crude futures opened with a huge bullish gap on Monday: trading closed at $ 60.12 on Friday, and at the beginning of the new week it started at $67.15. Thus, there was a 11.8% gap, which can be compared to the market’s reaction to the events during the Persian Gulf war in 1991. From the technical analysis side, we can expect the gap to be closed in the medium term. Quotes have already returned to the zone of $64.0-65.6 and, most likely, the decline will continue to $60.0 per barrel.

Two attacks were made by drones at the largest regional oil refinery in Abqaiq and Khurais, the country's second largest oilfield. Hussite rebels from Yemen claimed responsibility for the attacks. However, the US is already blaming Iran for the incident. As a result of the attack, Saudi Arabia reduced production by 5.7 million bpd (out of 9.8 million bpd), which corresponds to 5% of global production. Major market players have already expressed confidence that there will be enough commercial oil reserves to meet current demand. Saudi Arabia, in turn, plans to restore production in the near future.

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Source: https://olymptrade.com/
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