Oil eases losses as Saudi Arabia blames Iran for recent attacks

By Jessica Summers on 9/18/2019

NEW YORK (Bloomberg) - Crude trimmed losses after Saudi Arabia said Iran sponsored the recent attacks to its key oil production facilities.

Futures fell as much as 2.2% in New York before easing declines on Wednesday. The weekend attacks on the kingdom’s critical oil infrastructure were “unquestionably sponsored by Iran” and did not originate from Yemen, said Turki al-Maliki, a spokesman for the Saudi defense ministry.

The “Saudi remarks that Iran is clearly the responsible party for the attacks will provide any positive movement on oil prices,” said Rob Thummel, managing director at Tortoise, which handles about $16 billion in energy-related assets. “That means no negotiations with Iran and no improvement in sanctions.”

Iran has denied responsibility for the aerial attack, with President Hassan Rouhani saying it was carried out by Yemeni rebels fighting the Saudi-led coalition. Meanwhile, Abqaiq is now processing about 2 million barrels a day and should return to pre-attack levels of about 4.9 million barrels by the end of September, Aramco Chief Executive Officer Amin Nasser said Tuesday.

West Texas Intermediate crude for October delivery declined $0.76 to $58.58/bbl at 11:08 a.m. on the New York Mercantile Exchange. Prices touched $58.02 earlier in the session.

Brent for November settlement slid $0.55 to $64 a barrel on the ICE Futures Europe Exchange, and traded at a $5.68 premium to WTI for the same month.

An Energy Information Administration report showed domestic oil inventories rose by 1.06 million barrels last week, after four straight weeks of declines. Analysts in a Bloomberg survey had called for a 2.25 MMbbl drop in crude supplies. Gasoline stockpiles rose 781,000 bbl, while distillate supplies increased 437,000 bbl.

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