Oil prices spike higher on Saudi output disruption

Andrew Robinson MarketPulse

Oil prices spiked higher in early trading Monday following attacks on Saudi production facilities that cut half its daily output. This is having a negative effect on risk appetite and US indices have started the week poorly. There’s a Japan public holiday today.

US30USD Daily Chart

Source: OANDA fxTrade

The US30 index looks poised to snap an eight day winning streak today amid oil supply uncertainty
The index touched the highest since July 25 on Friday. The 55-day moving average has risen to 26,597
US President Trump and Japanese PM Abe to issue a joint statement about not raising tariffs on Japanese autos. Outline of trade agreement expected to be signed next week, according to Japanese press reports. There are no major US data releases scheduled for today.

DE30EUR Daily Chart

Source: OANDA fxTrade

The risk-off mood at the start of the week has not spared the Germany30 index, which looks set to fall for the first time in nine days
The 100-day moving average is at 12,113 and has supported prices since September 6
UK PM Johnson said to meet EU President Juncker today amid speculation he may get additional concessions on Brexit. That has boosted GBP to levels not seen since July 25. There are no major data releases for either Germany or the EU scheduled for today.

WTICOUSD Daily Chart

Source: OANDA fxTrade

Oil prices surged more than 10% in the biggest jump ever in early trading after unmanned aerial strikes hit Saudi oilfields, knocking out about 50% of its daily production
WTI soared to the highest level since May 21 and is nearing the 78.6% Fibonacci retracement of the April-August drop at $63.045
Market talk is that Saudi Arabia is set to restore nearly half of the lost output soon, but the balance will take some time. The Trump administration has said it is ready to deploy the nation’s emergency oil reserves to help stabilize markets if needed.

Author

Andrew Robinson

MarketPulse

A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentar

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