Oil slides a second day

Focus shifts to quick return of Saudi supply, ample stockpiles
Newsfeed19 Sep 2019
Photo credit: AFP Photo

Market news selected by the DBS Chief Investment Office


Crude declined as investors shifted attention to a speedy return of Saudi Arabia’s crude production amid signals that global inventories are plentiful.

Futures dropped Wednesday (18 September) in New York. The kingdom’s damaged Abqaiq oil facility is now operating at around 40% of its pre-attack levels and the facility should return to about 4.9m barrels by the end of the month, Aramco Chief Executive Officer Amin Nasser said Tuesday. Meanwhile, the International Energy Agency’s (IEA) Executive Director Fatih Birol said the oil market remains well supplied with ample stockpiles, despite the weekend attacks.

Earlier in the session, oil had eased some losses after Saudi Defense Ministry spokesman Turki al-Maliki said Saturday’s attacks on the kingdom’s critical oil infrastructure were “unquestionably sponsored by Iran” and did not originate from Yemen. Iran has denied responsibility for the aerial attack that shut 5% of global supply, with President Hassan Rouhani saying it was carried out by Yemeni rebels fighting the Saudi-led coalition. US President Donald Trump said the US will add “some very significant sanctions” and announce them within the next 48 hours.

The IEA’s Birol also said its members held about 1.55b barrels of emergency oil stocks, which are more than enough to offset any disruption.

West Texas Intermediate (WTI) crude for October delivery dropped 2.07% to settle at USD58.11 a barrel at the New York Mercantile Exchange. Brent for November settlement slid 1.47% to end the session at USD63.60 a barrel on the ICE Futures Europe Exchange, and traded at a USD5.56 premium to WTI for the same month. – Bloomberg News.


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