Saudi Arabia's "mother ship" attack unleashes pressure from Dead Cow

Oil prices have skyrocketed in the futures market, and Brent crude has recorded its largest percentage increase since the Gulf War in 1991, following the closure of the attack on Saudi oil facilities on Saturday. , nearly 5% of the world supply (about 50% of Aramco's production).

Brent crude futures, one of the international benchmarks, rose 19.5% to $ 71.95 per barrel, the largest intraday increase since January 14, 1991. The contract for the same month was 66%. $ 28 per barrel, up $ 6.06, or 10.1%, from its previous close.

In addition, West Texas Intermediate (WTI) futures contracts rose 15.5% to $ 63.34 per barrel, the highest percentage gain since June 22, 1998. The contract was placed the same month. at $ 59.77 per barrel, an increase of $ 4.92 or 9%.

Subsequently, the price increase was moderated after the message from Donald Trump, who authorized the use of US emergency reserves to ensure a stable supply.

Seizures on oil prices came after the coordinated attack of ten drones on the heart of the Saudi oil industry on Saturday, forcing the country to halve its oil production.

Public oil company Saudi Aramco "is the mother ship of the Saudi energy system," he told "El Economista", Helima Croft, commodities strategist at RBC Capital Markets. "It's probably the worst infrastructure attack we've ever seen in the kingdom," Croft said.

A source familiar with the matter told Reuters that the return to total oil production capacity could take "weeks, not days".

At the same time, Saudi Arabia's oil exports will normally continue this week as the kingdom takes advantage of stocks from its large storage facilities, another industry source said Sunday.

"We believe that the attacks will wake up investors, who have not reflected the risks badociated with the price of oil.Although the global supply will shrink in the short term, the United States has the ability to compensate for this contraction, "said Hue. Frame, executive director of executive funds in Sydney.

"With the events of the weekend, market players will add additional factors when calculating the fair value of crude oil, in addition to the usual factors of supply and demand."

Oil prices have remained relatively low in recent months because of the abundance of reserves and fears of a slowdown in the global economy on demand.

The Organization of the Petroleum Exporting Countries (OPEC) had even set production limits in an attempt to maintain price levels.

US President Donald Trump said he was approving the release of oil from the US Strategic Petroleum Reserve (SPR) if necessary, an amount that will be determined due to l & # 39; attack.

According to a senior US official, the attack on factories located in the heart of the Saudi oil industry was of Iranian origin and it is possible that cruise missiles were used. Initial reports indicated that the attack came from Yemen.

Trump also said the United States was ready for a possible response to the attack on Saudi oil facilities.

In this context, other badysts believe that "crude oil will quickly reach $ 100 if the market begins to dodge a US attack on Iran's infrastructure."

As explained by the Spanish media mentioned, Saudi Arabia has returned to Tehran under the spotlight of the Americans, who have not hesitated to accuse the Iranian radicals of being behind them. , even as the rebel organization of Yemen Huthi claimed responsibility for the event At the moment, the Huthis pointed out that Aramco's facilities could be attacked again "at any time". That's what's coming.

"In the worst case – for example, a closure of the Strait of Ormuz – will result in prices above $ 100. We think however that this extreme is a bit unlikely because important Iranian allies such as the Chinese would be very affected, "say badysts.

"We have never seen any break in supply or reaction of such prices in the oil market," said Saul Kavonic, credit badyst at Credit Suisse. "The geopolitical risk is back in the oil market," said Kavonic.

"The vulnerability of Saudi infrastructure to attack, historically viewed as a stable source of crude oil for the market, is a new paradigm that the market will have to face," said Virendra Chauhan, an badyst at Energy Aspects.

Fears are also going through the perverse effects that an increase in crude oil prices could have on the global economy. Craig Erlam, a senior badyst at Oanda, warned that the global economy could fall into recession in the face of a possible outbreak of the Persian Gulf conflict.

Dead cow

The shooting of Brent oil after the attacks in Saudi Arabia has doubled the pressure on Mauricio Macri's freezing of crude oil prices for the Argentinian market, which adds to the uncertainty of activity in Vaca Muerta Already affected by the suspension of thousands of workers and the leak of gas from a well in Loma La Lata this weekend, caused a fire that they believe could take between two and three weeks.

After the primary elections last August, Mauricio Macri froze by decree 566/2019, the Creole barrel to 59 USD, in order to avoid a sudden transfer to the prices of the devaluation. The same standard established an exchange rate of $ 45.19. Energy admitted that the value of the dollar was unreal and had recovered slightly to $ 49.50. At the same time, prices for gasoline and diesel fuel at suppliers have been set.

Today, the barrel is sold at 66.69 USD for a November delivery to the International Exchange Futures (ICE), compared to the previous close.

If one takes into account the Macri freeze in effect until mid-November, the delay of crude oil in the country can reach 13% in dollars compared to the international price.