Oil Surges After Attack on Saudi Arabia’s Oil Production

Over the weekend, Iran attacked Saudi Arabia’s oil production infrastructure. The result is that 6% of the world’s production has been knocked offline. Oil prices are surging today although the gains aren’t as dramatic as the initial pop we saw in other markets. Right now, I see that crude futures are up about 10%.

Most of the market is down today although energy stocks are up sharply. This is something you don’t see every day.

XLE +3.37%
XLB -1.08%
XLY -0.70%
XLP -0.48%

I doubt any production shortfall will last long. There’s certainly a lot of incentive to fill the void. The big question is, what comes next?

There are a lot of reserves held globally so no one is going to run out of oil. Right now, some experts are saying that it will take months for Saudi Arabia to get back to normal production. I’d take the under on that bet.

Posted by on September 16th, 2019 at 10:11 am


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