The attacks destroyed about half of Saudi crude production and severely limited the country’s reserve capacity, a boon to oil markets at any unplanned outages.
“The available global reserve capacity is extremely low currently following the weekend attacks, leaving little room for additional outages, which tends to be price supportive,” said UBS oil analyst Giovanni Staunovo.
Earlier this week Saudi Arabia said production would return to normal within two to three weeks, which would mean returning production to about 10 million barrels a day.
But traders and analysts are skeptical, and the lack of transparency about Saudi inventories adds to the uncertainty over whether Riyadh can keep supply markets uninterrupted.
Gary Ross, the founder of Black Gold Investors and a veteran oil industry expert, said it was hard not to believe Riyadh was being “overly optimistic” in its timeline given Saudi moves to push cargo and cut raw stairs into its oil facilities. “The tribulation is coming,” he said.
Saudi Arabia, the world’s leading oil exporter, has said the mutilated attack on its oil countries was “unquestionably sponsored” by regional rival Iran. Tehran has denied involvement in the strikes.
Oil prices rose on Thursday amid renewed concern over risks to global supply following last weekend’s attacks on Saudi Arabia’s oil infrastructure.
U.S. crude futures rose 1.1% or 70 cents to trade at $ 58.73 a barrel from 9:35 AM ET after rising to $ 59.48 earlier.
The Brent futures standard benchmark rose 1% to $ 64.67 a barrel, off a session high of $ 65.56.
Concerns about geopolitical tensions in the Middle East remained in the paragraph following Iranian Foreign Minister Mohammad Javad Zarif’s comments on Twitter earlier Thursday.