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Oil jumps 2% after drone attack on Aramco facilities

May 15

Oil jumps 2% after drone attack on Aramco facilities


Oil prices rose nearly 2% on Tuesday after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni-armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco.
Brent futures were up $1.21, or 1.7 percent, at $71.44 a barrel, while US West Texas Intermediate crude was up 87 cents, or 1.4 percent, to $61.91 per barrel.
Saudi Arabia said armed drones had struck two oil pumping stations in the kingdom on Tuesday in what it called a “cowardly” act of terrorism two days after Saudi oil tankers were sabotaged off the coast of the UAE.
US national security agencies said they believe proxies sympathetic to or working for Iran may have been responsible for the tanker attacks rather than Iranian forces themselves.
A fifth of global oil consumption passes through the Strait of Hormuz from Middle East crude producers to global markets.
The Organisation of the Petroleum Exporting Countries said on Tuesday that world demand for its oil would be higher than expected this year as supply growth from rivals including US shale producers slows, pointing to a tighter market if the exporter group refrains from raising output.
US oil output from seven major shale formations, however, is expected to rise to a fresh peak of about 8.5 million barrels per day in June, the U.S. Energy Information Administration said in a report on Monday.
The market was also holding out some hope for US-China trade talks as both sides expressed positive sentiments, which may signal the negotiations are not yet dead.

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