OPEN APP
Home >Markets >Commodities >Oil prices rise to 20-month high after missile attacks aimed at Saudi facilities

Brent crude oil surged more than two percent Monday following a missile attack on facilities owned by energy giant Aramco in Saudi Arabia, and on optimism about the demand outlook as the global economy recovers. A barrel of the black gold jumped 2.11 percent to $70.82 a barrel, the highest since May 2019.

A missile and drone attack targeted the heart of Saudi Arabia's oil industry on Sunday in an assault claimed by Yemen's Huthi rebels, a new escalation in the six-year conflict.

Also Read | What trade freedom did to Bihar’s farmers

The attack on energy giant Aramco's facilities came as the Saudi-led military coalition bombed Yemen's Huthi-controlled capital Sanaa after intercepting a separate flurry of cross-border Huthi drones and missiles.

The rising hostilities underscore a dangerous intensification of Yemen's conflict between the coalition-backed Yemeni government and the Iran-backed Huthis, despite a renewed US push to end the war.

The Saudi defence ministry said it had intercepted a drone targeting a petroleum storage yard at Ras Tanura -- one of the world's biggest oil ports -- and a ballistic missile aimed at Aramco facilities in Dhahran city in eastern Saudi Arabia.

Shrapnel from the missile fell close to an Aramco residential compound in the city, which is home to thousands of company employees and their families, the energy ministry said.

The attacks did not result in any casualties or damage, it added, without specifying who was behind them.

Government data released on Friday showed the US economy added a better-than-expected 379,000 jobs in February.

In oil markets, an announcement from producers that they would increase output by less than expected also helped prices reach highs unthinkable just months ago, when crude briefly slumped into negative territory as the pandemic pummeled global demand.

The decision on Thursday by the Organization of the Petroleum Exporting Countries (OPEC) and its allies to raise production only modestly was a show of "remarkable restraint," said Bjornar Tonhaugen, head of oil markets for Rystad Energy.

While the rollout of coronavirus vaccines, slowing infections, easing of lockdowns and the imminent new US stimulus are stoking optimism about faster global recovery, investors are increasingly worried that ultra-stimulative monetary policies -- a key pillar of the year-long equity surge -- will be wound down if inflation spikes.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout