Crude prices jump 12% after drone strikes halve Saudi oil output

[Yo_Mama_Been_Loggin]

Trump says U.S. to tap strategic reserves

Oil prices jumped on global markets Sunday night after a wave of weekend drone attacks instantly erased half of Saudi Arabia’s oil production.

Brent crude on Sunday traded at $70.98 per barrel on oil futures markets, an 18 percent surge from Friday’s close of $60.15, before falling back to about a 12 percent increase. U.S. benchmark West Texas intermediate crude opened at $61.27 per barrel, a 12 percent climb, before easing to a 10 percent gain.

On Sunday, President Trump said via Twitter that he had authorized the release of oil from the Strategic Petroleum Reserve in a to-be-determined amount. He added that he told government agencies “to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States.”

The attack on Saudi Arabia’s oil infrastructure immediately knocked out 5.7 million barrels — or nearly 6 percent of the 100 million barrels a day the world consumes.

“A supply disruption on this scale is an extraordinary event,” said Pavel Molchanov, an oil analyst with Raymond James. “No single disruption on this scale has occurred in decades.”

https://www.washingtonpost.com/business/2019/09/15/oil-prices-jump-after-weekend-drone-attack-saudi-arabian-oil-fields-infrastructure/

[albacore]

1. Help me with the math....

The strikes took out 50% of the Saudi production capacity. They have 37 days of stock on hand. They represent 5% (five percent) of world production.
And the prices of oil jumps like that?
You math...and market... wizards, please clue me in.
From what I see, it's a B.O.H.I.C.A. situation.

[Newest Reality]

2. I am not a math or market wizard, but...

Events fuel volatility in prices in the abstract to me. There is money to be lost and gained in the transactions themselves, and so, the actual, physical oil in itself is also subject to what investors and speculators think about it, although we would expect otherwise using common sense.

Consider it to be two spheres that overlap. One is the actual commodity and the other is what the people who move it, set prices for it, and speculate on futures believe about it. Then, add profits/losses in the exchanges and orders and, bippity, boppity, boo. The perception can be more potent and price effecting than the substance itself. After all, oil doesn't just sit there and say how much it is worth

[Buckeyeblue]

3. You are right on

Oil prices are set on perception. I think Trump's reaction is interesting because based on some of his comments, he seemed to be in favor of higher oil prices.

What's even more interesting is that gas prices will go up even though it will be months before oil that is bought at higher prices will be sold as gas.

It's all bullshit, really. Had we stuck with Cater's energy plan from 39 years ago, oil wouldn't matter to us. Sadly, the people thought Ronnie's ideas were better.

[safeinOhio]

4. Four dollar gas

won’t get him re-elected.

[Buckeyeblue]

6. Correct

Remember the criticism leveled against Obama when he released the reserves.

[albacore]

7. I remember. The trumpsters won't. It will be all... ummm... somebody's fault. Not trump. nt

[roamer65]

5. I hope gas goes to $6 a gallon.

That will fuck Dump really good. Hopefully the Houthi go for Ras Tanura.

Get ready for the Great Middle East War, folks.