Adedapo Adesanya
By Adedapo Adesanya
Oil prices bounced back on Thursday, supported by supply risks brought about by last weekend’s drone attacks on Saudi oil petrol plants.
Another reason was a cut in US interest rates which also drove prices up on Thursday.
Brent crude oil gained $1.04 to $63.70 per barrel, while US benchmark, West Texas Intermediate crude settled up 61 cents at $58.65 per barrel
The attacks brought down more than half of Saudi Arabia’s crude production and limited the country’s spare capacity.
Saudi Arabia further disclosed that it has set out a timeline for the resumption of full operations, saying it had restored supplies to customers at levels before the attacks by drawing from its oil inventories.
However, the Kingdom also said it would restore its lost production by the end of this month, and bring its output capacity back to 12 million barrels per day by the end of November.
Analysts say this means that Saudi Arabia will have no spare capacity for at least the next two and a half months and therefore no way to absorb any further shocks.
Saudi Arabia, the world’s leading oil exporter, has said the crippling attack on its oil sites was done by Iran
US President Donald Trump also said there were many options short of war with Iran and added that he had ordered the U.S. Treasury to increase sanctions on Iran which has denied involvement in the strikes.
