Military Attack On Iran An Option, Says Saudi Arabia

State oil producer Saudi Aramco has boosted total production capacity to more than 11 million barrels a day, according to people with knowledge of the situation.

Analysts said that the expected lower demand for oil inputs into USA refineries typically sees USA crude inventories swell, all of which could pose a significant downside risk for prompt oil prices.

Oil prices were down nearly 6% so far this week, marking the largest weekly loss in two and a half months.

Oil prices held almost flat on Thursday after U.S. President Donald Trump said a resolution to the China-U.S. trade rift would come sooner than expected, helping to stave off pressure from rising oil supplies and worries about global growth. The U.S. blamed Iran for the strikes, the latest in a string of tanker bombings and pipeline assaults since May.

A surprise 2.4 million-barrel build in USA crude inventories last week also weighed on prices.

"We've really been following headline to headline", said Phil Flynn, an analyst with Price Futures Group in Chicago. Saudi Arabia has deferred at least two shipments of LPG as it struggles to quickly recover the 5 million barrels per day of output that was lost in the attacks. In any event, the Trump Administration doesn't appear keen to meet with Iran at present, so crude will continue to trade with a geopolitical risk premium in the near term.

Oil fell after Friday's news, first reported by Dow Jones, that a partial cease-fire was in place.

Trump says he will meet with PM Imran, Indian PM Modi soon
Another key engagement of the Prime Minister will be a dialogue on responses to terrorist and violent extremist narrative. The Prime Minister will address the annual United Nations General Assembly (UNGA) session in NY on September 27.

The Saudi interruptions come as the oil market grapples with supply disruptions around the world and concerns over demand growth.

The COSCO vessels are equal to about 7.5% of the world's fleet of supertankers, Refinitiv data showed.

Emerging details related to the Trump impeachment inquiry also helped to dent demand sentiment, analysts said.

"News on the US-China front was positive on Wednesday, albeit without materially affecting oil prices".

The initial token deployment "will augment the kingdom's air and missile defense of critical military and civilian infrastructure", and will add to "an already significant presence of US forces in the region", he said.

Saudi Arabia's top diplomat, Adel al-Jubeir, said this week the United Nations was helping it identify the launch site, but suggested the investigation could take weeks, not days, to complete. In the USA, autumn maintenance work at some refineries is quelling demand for crude.

  • Sonia Alvarado