International oil prices rose nearly US$2 per barrel on Monday (12th). (AFP)
[Financial Channel/Comprehensive Report] International oil prices rose nearly US$2 per barrel on Monday (12th), and Saudi Arabia was attacked, which cooled market expectations for a possible increase in crude oil supply. At the same time, U.S. President Trump expressed his approval of Russia's resumption of increasing diesel exports and the ceasefire agreement between Russia and Ukraine to stop attacks on energy facilities.
Brent crude oil futures closed up $1.93, or 1.8%, at $106.65 a barrel on Monday, the highest closing price since September 15.
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U.S. West Texas Intermediate crude oil (WTI) futures in New York rose $1.89, or 2%, to close at $93.74 a barrel.
The Houthis, a Yemeni rebel group with close ties to Iran, claimed that they launched an attack on the international airport in Riyadh, the capital of Saudi Arabia, on Saturday (10th), killing 13 people and injuring more than 300 people. Multiple attacks occurred on Sunday (11th), further escalating regional conflicts and possibly further impacting the crude oil supply of Saudi Arabia, one of the world's major oil producers.
Analyst Louis Navellier said in a report: "The missile attack by the youth movement on Saudi Arabia's Riyadh airport was shocking, which will obviously make Saudi Arabia increase its retaliation against the youth movement. Saudi Arabia's oil refineries are still operating, but after the missile attack, an oil pipeline to the Red Sea was shut down, and five refineries were temporarily suspended."
News has emerged this month that more oil tankers have been attacked while sailing in the Strait of Hormuz, which may interrupt the recovery trend of Middle East crude oil exports since September.
Bjarne Schieldrop, a commodity analyst at SEB, said: "Exports in the Strait of Hormuz seemed to be gradually returning to normal last week, but this situation has been damaged. The youth movement has once again attacked Saudi Arabia, which has further aggravated tensions and pushed up oil prices."
In a report, Goldman Sachs raised its December Brent crude oil price forecast to $90 a barrel from $85 a barrel, estimating the current risk premium for crude oil to be just over $20 a barrel.
U.S. President Trump said on Friday (9th) that Russia would immediately supply more than 300,000 metric tons of diesel, equivalent to 2.25 million barrels, to the U.S. and global markets, with more supplies to follow. Following the news, diesel futures on the Intercontinental Exchange (ICE) fell 2.3% to $1,449 per metric ton.
Trump also unexpectedly announced on Sunday that Ukraine and Russia had agreed to a ceasefire and cease attacks on energy infrastructure. However, Ukrainian leader Volodymyr Zelenskiy accused Russia on Monday of violating a ceasefire agreement on energy facilities, and Russia has yet to comment.
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