Oil sinks 5% on forecasts of quick Saudi output recovery

By AFP
Published: September 17, 2019
Email
Market was already trading in negative territory after the previous day's record gains

Market was already trading in negative territory after the previous day's record gains

HONG KONG: Oil prices dropped 5 per cent on Tuesday, reversing some of the previous day’s gains as analysts said they were expecting Saudi output to recover sooner than expected after weekend drone attacks.

At around 1400 GMT, North Sea Brent crude oil for delivery in November was trading at $65.35 in London, a drop of 5.35 percent compared to Monday’s close.

The market was already trading in negative territory after the previous day’s record gains that were fuelled by attacks on Saudi facilities which wiped out half the kingdom’s crude output.

“The markets were once again wrong-footed by the Saudi news,” said Forex.com analyst Fawad Razaqzada in reaction to Tuesday afternoon’s price drop.

“This time prices slumped on reports of sooner-than-expected return for oil production after the attacks. Although little details have emerged, speculators are evidently happy to sell now and ask questions later. And who would blame them after that big (price) gap?”

Traders were meanwhile nervously awaiting further US response after it said Iran was likely to blame.

The crisis revived fears of a conflict in the tinderbox Gulf region and raised questions about the security of crude fields in the world’s top exporter Saudi Arabia as well as other producers.

Facebook Conversations

Leave Your Reply Below

Your comments may appear in The Express Tribune paper. For this reason we encourage you to provide your city. The Express Tribune does not bear any responsibility for user comments.

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments FAQ.

More in Business