We could see the shares of Santos Ltd (ASX: STO), Oil Search Limited (ASX: OSH) and Beach Energy Ltd (ASX: BPT) fall today.
You remember that less than a week ago some of the oil facilities in Saudi Arabia were attacked. This effectively halved the daily output of the country, which sent the oil prices 10% higher in quick reaction.
What’s Happening Now?
Aramco, the Saudi Arabian company that owns the facilities, has promised to restore its full production by the end of the month after the attacks.
According to the Australian Financial Review, production at the Khurais facility restarted in less than a day after the attack whilst the Abqaiq facility has gotten back to 2 million barrels per day.
Saudi Aramco President and CEO Amin Nasser said: “We have a hard-earned reputation for nearly 100 percent reliability in terms of meeting our international customers’ requirements and we have defended that.
“Not a single shipment to an international customer has been or will be missed or cancelled as a result of these attacks.”
Inventory and increased production at other sites will ensure that all of its customer obligations are met.
What Has This Done To Oil Prices?
As you can imagine, this caused the global oil price to drop back to close to what it was before.
The brent crude oil price fell 6.7% to US$64.40 per barrel and the WTI crude oil price dropped 5.9% to US$59.19 per barrel.
In early trading, the Oil Search share price is down 2.3%, the Beach share price is down 0.6% and the Santos share price is down 1.3%.
Oil is always going to be at the mercy of the supply and demand pressures.
Unless there’s another attack the oil price has probably hit the short term peak in my opinion.
Meanwhile I think the shares in the free report could provide much more consistent and reliable returns.
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