Brent Crude breaks $70 after Saudi Arabia oil terminal attacked

Saudi Arabia reported that the world’s largest and most protected crude terminal was attacked by missiles and drones during regional hostilities. The attacks were intercepted, the oil output remained unaffected while the incident sent the price of oil above $71 a barrel for the first time since January 2020.

The price surge comes during an accelerated oil rally triggered by last week Saudi Arabia’s decision not to increase oil production. The move impelled several investment banks to reevaluate and increase their price forecasts, with Goldman Sachs Group Inc. expecting that global benchmark Brent will overcome $80 a barrel in the third quarter.

The Sunday attack is the most severe one against Saudi Arabia's oil infrastructure since September 2019 when a facility and two oil fields came under attack stopping oil production for about a month and uncovering the high vulnerability of the Middle Eastern oil industry. The attacks don’t usually cause substantial damage but their increased frequency results in anxiety influencing oil and shipping markets.

A Market Overview

The bullish market is further reinforced by bullish Chinese export data and the U.S. stimulus outlook. President Joe Biden is close to getting his $1.9 trillion Covid-19 relief package, the second biggest economic stimulus in the history of the U.S., passed by the United States House of Representatives.

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