Crude Oil Price Explodes Over $70 a Barrel After Attacks Aimed at Saudi Oil Facilities; When is the Price Climb Going to Stop?

(Via Zero Hedge)

As if we don't already have a major driver of higher oil prices as a result of Federal Reserve money printing.

Oil prices jumped above $70 a barrel for the first time in 14 months after Saudi Arabia said its energy facilities had been attacked on Sunday.

A drone attack from the sea on a petroleum storage tank at Ras Tanura, one of the largest oil shipping ports in the world, took place on Sunday morning, reports the Financial Times.

Then in the evening, shrapnel from a ballistic missile fell in Dhahran, where state oil company Saudi Aramco has its headquarters and near where thousands of employees and their families live.

Yemen’s Iran-allied Houthi fighters claimed responsibility for the attacks and said they had also focused on military targets in the Saudi cities of Dammam, Asir and Jazan.

A Houthi military spokesperson said the group had fired 14 bomb-laden drones and eight ballistic missiles in a “wide operation in the heart of Saudi Arabia”.

While Saudi Arabia’s ministry of energy said the attacks “did not result in any injury or loss of life or property," FT notes the attacks have still unsettled oil markets that have rebounded strongly in recent months.

Brent crude, the international benchmark, has traded as much as 2.9 per cent higher to $71.38 a barrel overnight in Asia.

Even before the attack, Azerbaijan’s Socar Trading SA and Bank of America forecast that oil could climb over $100 per barrel.

Jeffrey Currie of Goldman Sachs and Christyan Malek of JPMorgan, according to FT, are confident that oil is ready for the next supercycle—a prolonged rise in the price of oil.

-RW