Oil prices rapidly declined in global markets, where they lost about $5 per barrel after the announcement of the Saudi Energy Minister of the restoration of full production of Aramco faster than expected after the terrorist incident.
A source in the petroleum sector told Daily News Egypt that Saudi Arabia was able to curb the sudden rise of oil in the markets after it jumped to about $69 a barrel compared to $60 before the incident. On Monday, the attack on the Saudi oil giant Aramco’s processing facility in Abqaiq lead to a surge of more than 14%. The hike is equivalent to the 1991’s Gulf War.
Saudi Minister of Energy, Prince Abdulaziz Bin Salman, said Aramco will regain full production by the end of this month. The attacks, which were claimed by Iran-backed Houthi rebels in Yemen, immediately led to the disruption of 5.7 million barrels of crude production per day.
Prince Abdulaziz bin Salman said that 11m barrels per day will be produced by the end of September and 12m barrels per day by the end of November.
The source added that the markets will become more stable after the control of the Aramco incident, making the price of oil ranging between $60 and $64 per barrel this month.
He expected oil prices to fall below $60 a barrel by the beginning of next month due to the glut of supply from exporting countries in more quantities than consumption in the world market.
He pointed out that Egypt was not affected by the sudden rise in oil prices because it has hedging contracts against the rise in oil prices on the world market, to secure the market needs of petroleum and crude oil.
The oil price rally fuelled by attacks on production facilities in Saudi Arabia is not sustainable, Commerzbank said on Wednesday, while lowering its 2020 price forecasts, citing deteriorating fundamentals including slowing demand growth.
The bank lowered its Brent forecast for next year by $5 to $60 per barrel while keeping its 2019 outlook unchanged at $65. It also reduced its 2020 forecast for WTI to $57 from $62. Commerzbank forecast WTI to average $58 this year.
The Saudi Energy Minister met with the Chairperson of Saudi Aramco Yasir Al-Rumayyan, and Chief Executive Engineer Amin Al-Nasser, and a number of other officials. During the meeting, they discussed developments in the Saudi oil production after the attacks.
Saturday’s attacks shocked supply, lifting oil prices by about 20% during Monday’s trading.