Light, sweet crude prices dropped more than $3/bbl on the New York market and Brent dropped by more than $4/bbl in London Sept. 17 after Saudi Arabia said it has already restored some crude oil production that was lost to attacks on a processing complex and an oil field.
Saudi Energy Minister Prince Abdulaziz bin Salman told reporters during a news conference that Abqaiq processing plant has restored 2 million b/d of production. He said oil production will reach 11 million b/d by the end of September. Saudi Arabia will restore its full capacity of 12 million b/d by Oct. 31, he said.
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 (OGJ Online, Sept. 16, 2019).
US President Donald Trump is investigating whether Iran might have been involved.
IHS Markit issued a note saying a limited impact in terms of time—7-14 days—would be manageable through any combination of Saudi stocks and world commercial inventories. An extended but manageable scenario—30-120 days—is most likely, analysts said on Sept. 17 before the Saudi news conference.
“Saudi Arabia is able to manage a partial return from the peak disruption of 5.7 million b/d, but it is unable to address the full extent of the damage on key facilities for as long as 4 months,” IHS Markit said. Such a disruption could trigger a coordinated release of world oil storage.
Energy prices
Light, sweet crude oil prices on the New York Mercantile Exchange for October delivery fell $3.56 to $59.34/bbl on Sept. 17 while the November contract declined $3.57 to $59.10/bbl.
The October gas price decreased 1¢ to settle at $2.67/MMbtu on Sept. 17.
Ultralow-sulfur diesel for October fell 9¢ to a rounded $1.99/gal. The NYMEX reformulated gasoline blendstock for October dropped nearly 8¢ to a rounded $1.67/gal.
Brent crude for November fell $4.47 to $64.55/bbl. The December contract decreased $4.12 to settle at $63.56/bbl.
Gas oil for October dropped $17.25 to $620/tonne on Sept. 17.
The average for the Organization of Petroleum Exporting Countries’ basket of crudes for Sept. 17 was $67.89/bbl, up $1.46.
Contact Paula Dittrick at [email protected].
