WASHINGTON: Saudi Arabia is shutting down half of its oil production after drones attacked the world’s largest oil processing facility in the kingdom, The Wall Street Journal reported on Saturday.
The closure will impact almost five million barrels of crude production a day, about five percent of the world’s daily oil production, the report added.
The WSJ reported that Saudi Arabia could drawing down its oil stocks to sell to foreign buyers to make sure world oil supplies won’t be disrupted by the attack and shutdown.
Hours after the drone attacks, business wire (news) services reported that this unexpected reduction in production could cause a temporary price-hike but overall the market will remain stable.
The reports pointed out that while oil prices have been gradually rising in recent weeks, a larger bearish trend has taken hold this week, and it could persist.
Brent crude, the international benchmark, fell 0.3 percent to $60.34 in Friday morning trading. West Texas Intermediate (WTI) futures fell 0.2 percent to $55.02, while the S&P 500 was up 0.2 percent Friday’s weakness in oil followed a three-day losing streak for the commodity. WTI was down 4.8 percent from Tuesday through Thursday, and Brent fell 3.5 percent.
Published in Dawn, September 15th, 2019