Crude oil futures closed higher on Friday (March 25) as investors feared a further tightening of oil supply following reports that a Saudi oil facility was attacked. The oil market is currently under intense focus as several factors, such as the situation in Ukraine and storm damage in Kazakhstan, could tighten supplies in the market.
- WTI crude futures were up $1.56, or 1.4%, at $113.90 a barrel and were up 10.5% for the week.
- BRENT crude futures were up $1.62, or 1.4%, at $120.65 a barrel and were up 11.8% for the week.
Oil prices rose after reports that a fire broke out at the Saudi oil plant, Cattle Monastery in Jeddah, Saudi Arabia. Yemen’s Houthi rebels said Friday the group fired a missile that hit the Saudi Aramco depot in the Saudi city of Jeddah, their third attack in less than a week.
News of the attack has added to volatility in the oil market. The latter is already facing supply risks due to the impact of the conflict between Russia and Ukraine.
Towards Thursday, oil prices fell further as the European Union (EU) is likely to refrain from imposing sanctions on Russian oil. In addition, it was reported that the Caspian Pipeline Consortium (CPC) will resume some of its oil exports.
New news from the Iran talks could bring oil prices down again somewhat. U.S. National Security Advisor Jake Sullivan said the U.S. and its allies have made progress in negotiations on the Iran nuclear deal.
Negotiations on the Iran nuclear deal have been ongoing for 11 months, and diplomats believe that the final stage of the negotiations has now been reached.
So far, Iran has produced an average of 2.4 million b/d in 2021 and is expected to produce 3.8 million b/d once sanctions are lifted.
Iran has the world’s fourth-largest oil reserves, but Iranian oil production has plummeted since the United States imposed sanctions in 2018.
The Spot Market is Closed
Saturday, March 26, 2022