Another rough day for crude
Oil is now lower than it was before the attacks on Saudi infrastructure.
Worries about a long-term impairment of production were misplaced as teh Kingdown announced today that it has restored production to 11.3 million barrels per day.
Aramco CEO Ibrahim Al-Buainain said that production might even be “a little higher” than target and that all damaged production was brought online on September 25.
Oil traders had been weighing conflicting reports on when production would return but now accept that it’s all back online. WTI is down $1.73 to $54.18 today and is trading at a session low.
Looking at the chart, notice that all the candles are red. Those aren’t all negative days for crude but they all featured intraday declines — a sign that producers have been hedging on any strength and something I warned about right after the attacks.
One thing bulls can cling to is that Houthis refused a limited ceasefire offer on the weekend and launched some attacks into Saudi Arabia. That helped at the open but all the optimism was swamped late.
Separately, Reuters’ benchmark survey on production showed 28.9 mbpd, down 750K from August — nearly all of it from Saudi Arabia. It would have been larger if they hadn’t released reserves. Those reserves will need to be rebuilt but it’s unclear if that will come from spare capacity or by trimming exports.