MARKET WATCH: Oil price benchmarks jump about $8/bbl

Light, sweet crude prices soared by about $8/bbl on markets in New York and London Sept. 16 as investors evaluated the effects on Saudi crude oil production following drone strikes that knocked out 5.7 million b/d.

Houthi rebels in Yemen have claimed responsibility for the Sept. 14 attacks on a crude oil and NGL processing complex at Abqaiq, which handles 7 million b/d, and at Khurais oil field, which produces 1.5 million b/d.

Saudi officials said crews suspended operations at Abqaiq and Khurais oil field (OGJ Online, Sept. 16, 2019).

S&P Global Platts Analytics analysts Shim Kim and Tony Starkey said it looks likely that 3 million b/d of Saudi crude supply will be offline for at least a month.

“Saudi Arabia [officials] will likely say that they can fully support their customers although as time goes on this may be challenging,” Kim and Starkey said. “Any indication of delays or supply tightness will lead to further price increases in the weeks, months ahead.”

US President Donald Trump told reporters on Sept. 16 that US Sec. of State Mike Pompeo will travel to Riyadh.

Energy prices

Light, sweet crude oil prices on the New York Mercantile Exchange for October delivery sharply climbed $8.05 to $62.90/bbl on Sept. 16 while the November contract surged $7.87 to $62.67/bbl.

The October gas price increased a rounded 7¢ to settle at $2.68/MMbtu on Sept. 16.

Ultralow-sulfur diesel for October gained by a rounded 21¢ to $2.08/gal. The NYMEX reformulated gasoline blendstock for October climbed nearly 20¢ to a rounded $1.75/gal.

Brent crude for November gained $8.80 to $69.02/bbl. The December contract increased $8.43 to settle at $67.68/bbl.

Gas oil for October soared $60.25 to $637.25/tonne on Sept. 16.

The average for the Organization of Petroleum Exporting Countries’ basket of crudes for Sept. 16 was $66.43/bbl, up $6.41.

Contact Paula Dittrick at paulad@endeavorb2b.com.