Adedapo Adesanya
By Adedapo Adesanya
Crude oil prices opened the new week in the positives on Monday, spurred by another set of drone attacks against Saudi Arabian energy giant Aramco’s facilities by Houthi rebels.
The tension raised by this act pushed the price of the Brent higher by 0.38 per cent or 24 cents to $63.19 per barrel and lifted the West Texas Intermediate (WTI) higher by 39 cents or 0.64 per cent to $59.70 per barrel.
The Yemeni Houthis claimed responsibility for the attack on the oil facilities in Saudi Arabia, a reminder of political tensions in the Middle East.
The Houthis targeted Aramco refineries in the western Saudi city of Jeddah and in Jubail in the east, with 10 drones launched at dawn on Monday.
While such attacks have increased this year, they rarely claim lives or cause extensive damage. The attack on the oil facilities comes amid a surge in fighting between the rebels and forces loyal to the Saudi-backed government in Yemen.
The Kingdom condemned the attack against vital installations, noting that it does not only target the Kingdom, but also petroleum exports, the stability of energy supply to the world, freedom of world trade, as well as the global economy.
The Iran-aligned rebels have struck Aramco facilities in the past, targeting the vulnerability of Saudi Arabia’s expensive and strategically vital oil infrastructure.
Prices were also supported by the fall of the US Dollar. A weakened greenback makes commodities such as oil priced in the US currency more attractive.
There are already signs emerging of the potential impact of a steady reopening in the US on consumption. United Airlines Holdings said it saw an acceleration in customer demand in March, while American air passenger numbers remain near their highest level since March.
Despite these positives, the market still has to contend with rising coronavirus cases just as the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) agreed to add more barrels from May.
Iran is also posing a serious threat to the stability of the market as the Middle East giant’s supply may return quicker than expected following advanced talks over sanctions.
