Crude Rebounds on Renewed Concerns About Saudi Production

An Aramco oil facility outside Riyadh, Saudi Arabia, on Sept. 15. The nation is reaching out to foreign producers to import crude and other petroleum products.

Photo:

fayez nureldine/Agence France-Presse/Getty Images

Sept. 19, 2019 12:32 pm ET

Oil prices rose Thursday as investors questioned Saudi Arabia’s ability to restore crude output after an attack on one of the kingdom’s largest oil facilities over the weekend. The rally came after The Wall Street Journal reported early Thursday that Saudi Arabia is reaching out to foreign producers to import crude and other petroleum products. Brent crude was up 1.5% at $64.56 a barrel Thursday morning, while West Texas Intermediate futures were up 0.7% at $58.43 a barrel.

Oil prices have swung sharply this week as investors try to gauge how severely the attacks will ultimately affect global oil supply. Oil futures soared Monday, followed by slips on Tuesday and Wednesday after Saudi officials signaled that output could return to normal more quickly that initially expected.

But news of the Saudi imports could indicate “that not everything’s rosy in the garden,” said Sucden Financial broker

Robert Montefusco.

“It doesn’t bode well and means it may take longer for Saudi supply to come back online.” Saudi Arabia isn’t usually an importer of crude, although it sometimes imports extra diesel during the summer, when there are higher demands on the power grid due to air conditioning. The amount it is looking for this week far exceeds usual demand. Elsewhere in commodities Thursday, most-active gold futures were down 0.4% at $1,509.10 a troy ounce in morning trading in New York. The Federal Reserve cut interest rates Wednesday, but signaled that officials were divided on how much to further reduce rates in coming months. Fewer rate cuts than anticipated could hurt gold, as lower interest rates tend to make it more attractive to investors. The precious metal struggles to compete with yield-bearing assets when borrowing costs rise.

Saturday’s attack on a Saudi oil facility could have long-lasting repercussions. Heard on the Street editor Spencer Jakab explains how it could impact the global markets. Photo: Hamad I Mohammed/Reuters

—David Hodari contributed to this article.

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