Brent is trading above $110 per barrel again following new drone attacks on Saudi oil facilities. ING analysts maintain that the risk premium will remain high.
Brent is trading above $110 per barrel after new attacks on Saudi Arabia, according to an analysis by FXStreet from experts Warren Patterson and Ewa Manthey at ING. The analysts believe that oil prices will remain well supported.
According to the report, drones struck the oil field at Shaybah and the international airport in Dammam, and a processing plant was one of the targets of the attack. The attacks resulted in fatalities.
The CEO of Kuwait Petroleum Corp noted that Kuwait is exporting crude at volumes similar to those before the war and is producing more than 2 million barrels per day. However, he acknowledged that maritime transport of refined products is the biggest issue.
Data from the EIA shows that US crude inventories fell by 3.06 million barrels last week, and Strategic Petroleum Reserves decreased by another 300,000 barrels. US production is estimated to have dropped by 410,000 barrels per day week on week, an effect still reflecting hurricane activity in the Gulf of Mexico.
President Donald Trump has expressed concern that prices will remain high due to supply risks. For ING analysts, the risk premium embedded in prices will not disappear until there are clear signs of de-escalation that reassure investors.
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