Oil Plummets 6% as Saudi Minister Says Supplies Fully Restored

 

September 18, 2019

 

Oil prices tumbled about 6% on Tuesday after Saudi Arabia’s energy minister said the country has managed to restore oil supplies to where they stood before weekend attacks on its facilities shut 5% of global oil output.

 

Saturday’s attacks raised the specter of a major supply shock in a market that in recent months has been preoccupied with demand concerns and faltering global growth. Oil surged as much as 20% at one point on Monday.

 

During a news conference on Tuesday, Saudi Energy Minister Prince Abdulaziz bin Salman said the kingdom has recovered supplies by tapping inventories, and lost oil output of 5.7 million barrels per day (bpd) by the end of September.

 

Brent crude futures sank $4.47, or 6.5%, to settle at $64.55 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $3.56, or 5.7%, to settle at $59.34 a barrel.

 

Brent sank more than 7% during the news conference.

 

In a note, Caroline Bain, chief commodities economist for Capital Economics, said: “The latest news means that we will not be rushing to revise up our oil price forecast of $60 per barrel at end-2019. That said, there remain some important questions to be answered about the attacks, which may mean that we will have to consider a permanently higher risk premium in our price forecasts.”

 

(Reuters)