New York, 18 Sep 2019: Oil prices dropped sharply Tuesday as Saudi Arabia announced that the country will not curtail oil production.
Oil prices initially fell after Reuters reported Saudi Arabian oil production would return to normal within two to three weeks. Giving relief to the entire world, the Saudi Energy Minister of Saudi Arabia, Abdulaziz bin Salman, said the country's oil exports would not fall in September. He also added that the state oil giant Aramco had emerged "like a phoenix from the ashes" after the attack.
Brent crude has slumped by more than four dollars per barrel, dropping back to just $64.77 -- having hit $69/barrel earlier this morning. That’s a huge move -- down around 6% today (almost half of Monday’s incredible surge). US crude is also plunging, down almost $3 per barrel to $60.16.
The news immediately calmed the oil markets, with the price falling 7% on Tuesday after Monday's huge spike of more than 14%. Also, President Donald Trump said it was no longer necessary to release reserves from US emergency stocks.
The drone attack at Abqaiq oil-processing facility and Khurais oil field cut off about 5.7 million barrels a day in production, about half the country’s total output and some 5% of global oil supply. The drone attacks came as the state-owned Saudi Arabian Oil Co., Aramco, amid the busy preparation for a two-stage initial public offering. Aramco hopes to raise as much as $100 billion in the dual debut, which would make it the biggest IPO ever. A Saudi official on Tuesday categorically said plans for the stock market listing of Aramco, would continue "as is".