- WTI holds the upside amid supply and geopolitical concerns after Saudi attack.
- Oil posted biggest daily spike on record, as 5% of global output knocked-off.
- Focus on Middle-East developments and US crude supplies for fresh directives.
WTI (futures on Nymex) corrected half the massive 20% surge seen at Asia, still holds around 9% firmer in the European trading, as investors assess the effects of the Saudi attack and its implications on the oil market.
Meanwhile, escalating US-Iran geopolitical tensions, in the face of the Saudi attack also helps keep the buoyant tone intact around the black gold.
Geopolitics to drive oil in the near-term
The barrel of WTI saw the biggest oil price surge since 1991 on Monday after Yemen's Houthi rebels on Saturday took responsibility for the attacks, saying 10 drones targeted state-owned Saudi Aramco oil facilities in Abqaiq and Khurais. The attack disrupted half of the kingdom's oil capacity or 5% of the daily global oil supply. WTI skyrocketed to four-month tops of 63.47 while Brent rallied hard to the highest since May at $ 71.62, having witnessed a bullish opening gap.
The sentiment around oil prices remains underpinned, as the sources familiar with the Saudi situation say that Saudi Aramco's full return to normal oil production volumes reportedly 'may take months', despite the OPEC Chief Barkindo and other key oil producers noting that Saudi has ample oil inventories.
Meanwhile, the US continues to accuse Iran of being responsible for the Saudi attacks, as the attack was led by Iran-aligned Houthi movement that controls Yemen’s capital. The widening geopolitical rift between the US and Iran also raises supply risks and adds to the positive tone around the black gold.
Looking ahead, all eyes will remain on the Middle-East developments, especially after Houthi Military said that they will continue to target Saudi’s Aramco oil plants, for fresh oil trades. Markets also await the US weekly supply reports due later this week for near-term trading incentives on oil.
WTI Levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.