Oil Prices Set to Spike on Saudi Attacks

As those folks that have been following the news this weekend already know a drone attack on Saudi oil fields and facilities has forced Saudi Aramco to shut down over 5 million barrels of oil production–about 1/2 their production. We can expect to see a spike in crude prices Sunday when global trading restarts.

On a global basis there are plenty of crude reserves to serve the needs of everyone, but as we all know there will be knee jerk reaction of some sort–will it be $1 or $10 dollars (or more) is the question. Additionally whether this is a short term issue or will it take some time to bring production back on line.

14 thoughts on “Oil Prices Set to Spike on Saudi Attacks”

  1. A drone attack is NOT a cruise missile or a build up of an insurgency of well equipped troops on some imaginary border. It is just a titillation of news or overt stimulation to keep an actively charged subconscious that has purposefully been put there by constant hypnotic suggestion. We must maintain a war economy and FEEL as REAL as if there is some attack on My Self…I have something to lose. Push the button Dr. Pavlov. We are indeed programmed. It is an overtly applied method. I’d hate to be watching CNBC this AM.
    Investing in oil is not a news based event. Oil is consumed at 100MM bbls a day and growing trend even if there is a speculative recession. Prices MUST move, that’s how BROKERS make their money. If you are in good….if not are you going to supply liquidity by buying right now? That is the question. Same with preferreds.
    For the record: Oil has been cheap and retraced 60% off a bottom. Did you buy? I did and posted it here, good divys and sold options for the INCOME. (see common stock posts) An alternative to preferreds. OK. Not griping just stay unemotional and try to invest in the Void.
    Steamboat Springs CO, frost and sunny day!! JA

    1. Thank god for RSS feeder app for this site. Tim, i think every day i get home from work, it tags 100+ posts every day. There is so much commentary now. I can view the new posts, clear the feeds, etc. If you have the same growth next year, 200, 300, 500 posts per day.

      I do like the idea of keeping the reader alerts blog lean and mean. I can focus on reading that every day. Not being retired, it is really tough keeping up on all the commentary.

  2. The Saudis have been griping about oil prices for a good while now. I wonder if they’re thinking about slow-walking the repairs so their oil in storage can enjoy the spike.

    Their infrastructure, pipelines, etc., are so spread out, they are relatively easy targets. And if this conflict spreads, well…

    Who supplied the drones? Who benefits? My, my. Interesting times.


  3. Reuters reports that about 75% of Saudi oil production is sold to Asia – i.e. China, Japan, South Korea, India and Taiwan + others. The US buys about 1 million barrels per day which is only about 10% of Saudi production. Will any shortfall benefit oil production in Texas, as one of the major oil producers in the world, albeit temporarily?

  4. Many US refineries are set-up to refine only heavy sour crude from the places like Venezuela and tar sands. Permian oil is light sweet that does not provide as much down stream product which is why chemical companies have seen their margins shrink since they are competing for the little raw material out there.

  5. Tim, Pompeo is blaming Iran. One of these times this could become much bigger as regardless of proximate cause, can’t help wonder how long affected players will put up with Iran’s antics of blowing holes in the side of ships, arrest (abduction) of three UK/Aus citizens in the last week as well as other significant destabilizing soirées. There’s obviously some calculated risks at play here, let’s hope decision-maker calculator batteries hold out.

    1. George–I have seen various periods mentioned, but I am always a skeptic of various experts etc. Guess we will just see what happens.

      1. I think I recently read a) opec was reducing production to maintain price and,

        b) we – u.s.- was pumping close to or more than saudi. I do know the oil stored in the strategic petroleum reserve is “heavy” which is tough to refine.

        saudi’s have been bombing rebels – with refueling provided by guess who?

        1. billo–of course this attack was bound to happen and it will have little long term affect–BUT we always have possibilities of the spread of violence. I believe I saw the Saudi’s have 188 million barrels of crude in storage so there will be no true shortage, but knee jerk reactions will happen.

      2. First time on this site. KUDOS Tim. I am VERY active investor in preferred and other income areas. Thank you for organizing by far the best site and frankly source in general for such a vast trove of information and commentary relating to what I do. Due to my job, I am highly unlikely to be able to post anything other than this WOW compliment. But, I am reachable as it is useful to you . Yes, I am up comping income securities at 547 am on Sunday morning (best time for quiet work while family still sleeping !)

        1. Craig – good to have you here. Hopefully I will have some much better data–organization in the next few months. I understand being up early-it is my most productive time.

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