Oil prices rise after attacks on oil facilities in Saudi Arabia; Major buyers in Asia hold sufficient oil reserves

This week: all eyes are on oil prices after the attacks on Saudi oil facilities this weekend. Saudi Aramco confirmed that the attacks resulted in a temporary loss of 5.7 million barrels of oil per day, or nearly 60 percent of production, reducing global supply.

In the initial reaction to the news, ICE's first-year Brent climbed nearly 20% to $ 71.95 a barrel, while the NYMEX crude futures for the first month surged 15% to $ 63.34 per barrel. Prices, however, reached their highest levels, as the market equated a tweet by US President Donald Trump, who authorized the release of US strategic oil stocks "as needed, in an amount to be determined for the oil market to remain well. stocked.

S & P Global Platts Analytics estimates that oil prices could reach 80 USD / b over the next few days.

With the impact of Saudi attacks becoming clearer, at what level could crude prices rise? Share your thoughts with the PlattsMM hashtag.

Focusing on Asia, major buyers of Saudi crude in the region are unlikely to press the panic button for now. Crude consumers in Northeast Asia and India have ample oil reserves to cover any shortage of Saudi oil for a few months, and refiners have a wide range of sources of supply alternatives.

Also in oil, the expected reduction in Venezuelan crude imports from Venezuela could offer suppliers of heavy crude from other regions the opportunity to sell additional cargoes to the largest oil consumer in Venezuela. Asia in the coming days and weeks.

PetroChina, a Chinese state-owned company, will suspend directly the purchase of Venezuelan crude oil, in accordance with US sanctions imposed on a South American producer, companies and industry sources, on the sidelines of the S & P Global Platts Asia Pacific conference on hydrocarbons last week in Singapore.

To offset the potential shortage of Venezuelan heavy sour, a series of rare and exotic heavy crude brands, including Singma Blend and Malaysian Blend, as well as many Canadian shades, such as Cold Lak and Borealis Heavy Blend, appeared in the last List of purchases of Chinese Independent Refiners.

In the agricultural sector, China remains at the center of concern after Beijing has bought 5 to 10 shipments of soybeans in the United States as a sign of goodwill, after the announcement by the US of a postponement. two weeks of additional customs duties on Chinese products.

Cereal and oilseed futures advanced, responding to surprising soybean purchases in China, as well as a downward supply and demand report from the US Department of Agriculture.

In the steel market, the National Bureau of Statistics of China is expected to release its August data on capital investment. This will give the market an indication of the strength of investments in the markets of infrastructure, construction and real estate, which are the main drivers of steel demand in China.

Finally, in the LNG sector, market participants expect that the cash market is likely to be supported, due to uncertainties in the European gas market and Cameron supply problems in the United States. However, market fundamentals may also provoke some resistance due to the low interest of North Asian buyers and the supply oversupply situation.

Thank you for launching your Monday with us. Good week to come!