Oil rises to over $120 a barrel after attack on Saudi facilities

The sun sets behind the chimneys of the Total Grandpuits oil refinery, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann

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  • Aramco fuel distribution facility hit by Houthi attack
  • Benchmarks post first weekly gains in 3 weeks
  • US considering another SPR version that could exceed 30 million barrels -source
  • US adds oil rigs but at slowest pace since 2020

HOUSTON, March 25 (Reuters) – Crude prices rose more than 1% to over $120 a barrel on Friday as traders reconciled the impact of a missile attack on an oil distribution facility in Arabia Saudi Arabia with a possible release of oil reserves by the United States. states.

Brent crude settled at $1.62, or 1.4%, at $120.65 a barrel and US West Texas Intermediate (WTI) crude ended at $1.56, or 1.4% higher. high, at $113.90. Both had lost $3 earlier.

Both benchmarks posted their first weekly gains in three weeks – Brent rose more than 11.5% and WTI gained 8.8%

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Yemen’s Houthis said they launched attacks on Saudi energy facilities on Friday and the Saudi-led coalition said Aramco’s fuel distribution station in Jeddah was attacked, but that A fire in two tanks at the facility had been brought under control. Read more

Saudi Arabia has said it will not be responsible for any oil supply shortages in world markets caused by Houthi attacks on its oil facilities.

The Iran-aligned Houthi movement, which has been fighting a Saudi-led coalition for seven years, launched missiles at Aramco facilities in Jeddah and drones at Ras Tanura and Rabigh refineries, said the group’s military spokesperson.

“The market, which was already shunning Russian oil supplies, has another thing to worry about with Houthi attacks that could impact production from Saudi Arabia,” Andrew Lipow, president of Lipow Oil Associates told Reuters. Houston, noting that Houthi attacks were becoming more frequent.

The attack comes just five days after the Houthi group fired missiles and drones at Saudi power and water desalination facilities, causing a refinery to temporarily drop output. Read more

With global inventories at their lowest since 2014, analysts said the market remained vulnerable to any supply shocks.

The Biden administration is considering another release of oil from the Strategic Petroleum Reserve which, if realized, could exceed the sale of 30 million barrels earlier this month, a source said.

The number of US oil rigs, an early indicator of future production, rose by seven to 531 this week, its highest level since April 2020, as the government urged producers to increase production following Russia’s invasion of Ukraine.

Even though the number of oil rigs has increased for 19 consecutive months, the increases have been small and have slowed recently as many companies focus on returning money to investors rather than increasing production and face supply constraints.

Oil prices fell earlier in the session as exports from Kazakhstan’s CPC crude terminal partially resumed and the EU delayed imposing an embargo on Russian energy, with members remaining divided on the question.

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Reporting by Arathy Somasekhar in Houston and Ahmad Ghaddar in London; Additional reporting by Sonali Paul in Melbourne and Isabel Kua in Singapore; Editing by Marguerita Choy and Mark Porter

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