Oil rises after attack on Saudi facilities

Crude prices rose more than 1% to over $120 a barrel on Friday, as traders reconciled the impact of a missile attack on an oil distribution facility in Saudi Arabia with a possible release of oil reserves by the United States. Brent crude settled up $1.62, or 1.4%, to $120.65 a barrel and U.S. West Texas Intermediate (WTI) crude ended $1.56, or 1.4% higher, at $113.90. Both benchmarks notched their first weekly gains in three weeks – Brent rose more than 11.8% and WTI gained 8.8%. Saudi Arabia said Aramco’s fuel distribution station in Jeddah had been targeted by an attack, but the fire in two tanks at the facility had been brought under control. Saudi also said it will not hold responsibility for any shortage of oil supplies in global markets caused by attacks on its oil facilities. The market, which was already shunning Russian oil supplies, has another thing to worry about with the attacks potentially impacting Saudi Arabia’s production, analysts said. Meanwhile, the Biden administration is considering another release of oil from the Strategic Petroleum Reserve that, if carried out, could be bigger than the sale of 30 million barrels earlier this month, a source said.
Asian LNG prices stable on Japanese demand
Asian spot liquefied natural gas prices were stable last week on solid demand from Japanese utilities but amid renewed uncertainty over Russian supply after Moscow’s demanded that some countries should pay for gas purchases in roubles. The average LNG price was estimated at $35.00 per metric million British thermal units, down $0.50 from the previous week, industry sources said. In Asia, Japanese utilities tapped the spot market after an earthquake urged higher demand for LNG to replenish stocks. The market is also trying to comprehend the long-term impact on LNG markets after the United States said it will work to supply 15 billion cubic meters of LNG to the European Union this year to help it wean off Russian energy supplies. U.S. LNG plants are producing at full capacity and analysts say most of any additional U.S. gas sent to Europe would have to come from exports that would have gone elsewhere. Meanwhile, President Vladimir Putin said on Wednesday that Russia will seek payment in roubles for gas sold to “unfriendly” countries, raising the risk of a supply squeeze and even higher prices. It remains unclear whether Russia has the power to unilaterally change existing contracts agreed upon in euros.
— By the Al-Attiyah Foundation