LONDON: Oil prices rose sharply on Thursday, supported by supply risks as the market assessed the impact of drone attacks on Saudi oil.
Greenwich Mean Time 1219 Brent crude oil futures LCOc1 rose 1.78 US dollars to 65.38 US dollars per barrel, while the US West Texas Intermediate crude oil CLc1 rose 1.28 US dollars to 59.39 US dollars per barrel.
Saudi Arabia’s crude oil production is reduced by about half and severely limits the country’s surplus capacity, which is a buffer for any unplanned blackouts in the oil market.
Earlier this week, Saudi Arabia set a timetable for restoring full operations and said it had taken oil stocks to resume supply before the attack.
It said it will resume its production losses by the end of this month and return its production to 12 million barrels per day by the end of November.
“These plans show that Saudi Arabia has no spare capacity for at least the next two and a half months, so it can no longer absorb any further impact,” said consulting firm Energy Aspects.
A Kuwaiti official stated that as a precautionary measure, Kuwait’s oil sector has raised its safety to the highest level.
In addition, the weekly information provided by the Energy Information Administration on US oil inventories provides a complex snapshot.
As the world’s largest oil producer, US crude oil inventories increased by 1.1 million barrels last week, while analysts expect a drop of 2.5 million barrels.
However, benchmark futures delivery points in Cushing, Okla., fell to their lowest point since October 2018.