Crude Oil Prices spike following Attacks on Saudi Arabian Oil Facilities

Motorists can expect some volatility at the pump in the coming days and weeks. Over the weekend, Saudi Arabia experienced drone attacks on two major facilities, including the world’s largest, Abqaiq.  The attacks have taken 5.7 million (crude) barrels per day off of the market, accounting for about 6% of the global supply. “It is too early to know the full impact on pump prices,” said Tiffany Wright, AAA spokesperson. “What we do know is that motorists can expect local pump prices to start to increase this week. The jump could be as much as a quarter over the course of this month.”  Whether this increase is a short or long-term trend will be determined by how quickly the facilities in Saudi Arabia can recover and get back online. Damage to the facilities is still being accessed, but there is no word if it will be days, weeks or even months before infrastructure is repaired. To ease concerns, President Trump said he has authorized the release of crude from the Strategic Petroleum Reserve. Other Saudi-oil-consuming countries also have emergency reserves to help back-fill the global loss, if needed.  Prior to the attacks, global crude oil supply was very healthy, in fact sitting on a global glut of stocks. Regardless, initial market reaction to the attacks spiked crude oil prices. At the start of the work week, crude oil (West Texas Intermediate, WTI) is trading for $5/bbl more than on Friday’s closing, up to $61/bbl – a price point for crude not seen since May. Gas price averages across the nation can be found at www.gasprices.aaa.com.  AAA, an affiliate of the American Automobile Association, is a not-for-profit organization that serves more than 2.2 million members and the public with travel, automobile and insurance services while being an advocate for the safety and security of all travelers.