Oil prices rise
Oil prices climbed after reports of a Saudi Aramco refinery being hit by Houthi rebels, with the West Texas Intermediate contract advancing 0.8% to $92.17
Oil prices rose on Monday after reports of a Saudi Aramco refinery being hit by Houthi rebels in Saudi Arabia close to the Yemen border. The West Texas Intermediate contract for October delivery advanced 0.8% to $92.17 a barrel, having briefly touched $93 earlier in the session.
Oil price movement
The rise in oil prices took both the U.S. Benchmark and the international benchmark to their highest levels since July 23. According to MarketWatch, the early moves took both benchmarks to near seven-week highs before edging lower.
Impact on stock-index futures
The rise in oil prices pushed U.S. Stock-index futures down from early Monday highs as Treasury futures also dipped on concerns higher energy costs would bolster inflationary pressures. The U.S. Cash equity and bond markets were closed on Monday for Labor Day.
Conflict in the region
The attack on the Saudi facilities came after Mohsen Rezaei, the new secretary of Iran’s Supreme National Security Council, said the country was planning to unveil an “exclusion zone” to prevent ships from entering the Strait of Hormuz. The U.S. And Iran have continued to exchange military strikes, bringing the renewed round of hostilities into a second week.
OPEC production
Over the weekend, members of the Organization of the Petroleum Exporting Countries and allies agreed to keep oil production unchanged in October from September after increasing output for six months in a row. Jim Reid, of Deutsche Bank, wrote in a Monday note that the main focus in the Iran conflict over the weekend was a tit-for-tat escalation targeting commercial shipping in and around the Gulf.
The following oil prices were reported:
| Contract | Price | Change |
|---|---|---|
| West Texas Intermediate | $92.17 | +0.8% |
| Brent crude | $97.36 | +1.00% |
| CL.1 | $92.17 | +0.85% |
| CLV26 | $92.17 | +0.85% |
| BRN00 | $97.36 | +0.99% |
| BRNX26 | $97.36 | +1.00% |
Two people familiar with the situation said that the damage to the Saudi Aramco refinery is currently being evaluated. The group has previously attacked the same infrastructure, the latest time being in August, which caused some delays to oil production. Iranian Parliament speaker Mohammad Bagher Ghalibaf told state media on Sunday that the U.S. Must understand the “rules of the game have changed” and warned of “a faster, heavier, and more painful response” to U.S. Strikes.
