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Oil stocks started soaring after an unexpected incident

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Oil stocks started soaring after an unexpected incident

Due to a sudden surge in the prices of crude oil, stocks of oil companies started ascending on Monday. The prices started trading in full swing since May. This was due to sudden drone attack on Saudi Arabia’s oil production facilities. The attack on the plant ceased the output of more than 5.7 million barrels of crude a day.

According to the analysts, the sudden surge in oil prices would be alleviated in the near term, as reported by CNBC.

As reported by Associated Press, by late morning in Asia on Monday, U.S. crude oil gained $4.89 per barrel, or added 8.9%, to $59.73 per barrel early Monday in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, surged $6.02 per barrel, or 10%, to $66.25 per barrel.

Alan Gelder, Head of Oils Research at Wood Mackenzie stated, “This attack has material implications for the oil market, as a loss of 5 million barrels per day of supplies from Saudi Arabia cannot be met for long by existing inventories and the limited spare capacity of the other OPEC+ group members.”

(Reference: CNBC, Yahoo Finance, Associated Press)
(Image source: Fayez Nureldine | AFP | Getty Images)