Oil bulls just can’t catch a break.
You’d think the latest news out of Saudi Arabia would have sent the crude oil price soaring.
And…ever so briefly…it looked like it might.
The news in question is another Yemeni rebel missile attack on oil giant Saudi Aramco’s facilities.
The Iranian backed Houthi rebels were responding to Saudi supported air strikes in Yemen. They hoped to cripple Saudi Aramco’s 400,000 barrel per day refinery in Jazan.
And, as Bloomberg reports, the attack wasn’t limited to the refinery.
‘The rebels also used missiles and drones against Abha and Jazan airports, the Khamis Mushait base, and other targets inside Saudi Arabia, Houthi spokesman Yahya Saree said on television.’
Brent crude futures rose 1.9% on news of the attacks before retreating.
At time of writing Brent is up a meagre 30 US cents per barrel, or 0.05% in the past 24 hours. West Texas Intermediate crude went the other way. It’s down 1.1%.
You can see the recent oil price action in the below chart:
The muted reaction from oil traders can partly be pinned on Saudi defences allegedly intercepting all the incoming missiles. The refinery looks to have survived unscathed.
But the real issue for oil bulls is the flood of oil waiting to inundate the market. A flood that OPEC+ can’t hold back indefinitely.
The latest bad news for investors long on oil comes from the US Energy Information Administration (EIA). The EIA reported that US petrol supplies are at a record high. And crude stockpiles increased by 3.6 million barrels…once again exceeding analyst expectations.
And this with most oil exports shuttered from Venezuela, Iran and Libya. And with the output cuts from OPEC+ still in place. At least until the end of March…
The ongoing supply glut will likely spell more bad news for the big energy stocks.
Of course, it’s more than just energy stocks that are under pressure.
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