Oil surges, stock futures slip after attack on Saudi facility

Oil surges, stock futures slip after attack on Saudi facility

SYDNEY: Oil prices surged to six-month highs on Monday (Sep 16) while Wall Street futures turned low..

SYDNEY: Oil prices surged to six-month highs on Monday (Sep 16) while Wall Street futures turned lower and safe haven bets returned after weekend attacks on Saudi Arabia's crude facilities knocked out more than 5 per cent of global oil supply.

US crude futures jumped 15 per cent to the highest since May. It was last at US$60.89 a barrel while Brent crude was up 13 per cent at US$68.06 after earlier rising to US$71.95.

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Signaling a weak start for Asian share markets, E-Minis for the S&P 500 were off 0.4 per cent while those for the Dow eased 0.3 per cent.

Liquidity in Asia is expected to be thin on Monday with Japan shut for a public holiday, which could exacerbate market volatility.

"Saturday's news of multiple drone attacks on Saudi Arabia Abqaiq petroleum processing facility is set to reverberate through global markets this week," said Ray Attrill, head of forex strategy at National Australia Bank.

READ: Saudi Arabia battles market jitters after oil plant attacks

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In addition to massive supply disruptions, the attacks also heightened investor worries about the geopolitical situation in the region and worsening relations between Iran and the United States. Those concerns powered safe-haven assets with prices for gold climbing 1 per cent in early Asian trade to US$1,503.09.

The Yemeni Houthi group had claimed responsibility for the attack, which hit the world's biggest oil-processing facility but a senior US official told reporters on Sunday that evidence indicated Iran was behind it.

US President Donald Trump said on Sunday he authorized the release of oil from the US Strategic Petroleum Reserve (SPR) if needed in a quantity to be determined because of Saturday's attack on Saudi Arabia's oil facilities.

"Based on the attack on Saudi Arabia, which may have an impact on oil prices, I have authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount sufficient to keep the markets well-supplied," Trump said on Twitter.

"I have also informed all appropriate agencies to expedite approvals of the oil pipelines currently in the permitting process in Texas and various other States."

In currencies, the Saudi news pushed the yen up 0.2 per cent to 107.8 per dollar while the Canadian dollar rose 0.5 per cent in anticipation of higher oil prices.

The euro was little moved near a three-week top while the pound hovered near Friday's two-month highs. That left the greenback down 0.15 per

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