Investing.com - Crude prices tumbled on Tuesday after top exporter Saudi Arabia said it will have more output capacity by end of this month than before the attacks at the weekend that briefly knocked out half of its production.
U.S. West Texas Intermediate crude settled down $3.56, or 5.7%, at $59.34 per barrel, reacting to the first official Saudi update on its production since Saturday’s attacks on the Abqaiq crude processing complex and Khurais oilfield. The attacks cut daily world oil supply by 5%.
U.K. Brent crude settled down $4.47, or 6.5%, at $64.55.
Both WTI and Brent jumped more than 14% each in Monday’s session.
Saudi Prince Abdulaziz bin Salman told a news conference in Riyadh that the kingdom will have the ability to produce 11 million barrels per day by Sept. 30 and 12 million bpd by end November, Bloomberg reported.
Saudi Arabia produced 9.85 million bpd in August. The last time it produced as much as 11 million bpd was nearly a year ago, in November 2018.
The Abqaiq facility, which had 4.9 million bpd of output before the attacks, has also had about 2 million bpd restored, Nasir Ameen, chief executive of national oil company Saudi Aramco said, according to the report. Full production was expected to return by end of September.
Some oil market participants were skeptical of the kingdom’s assessment of its ability to rebound so strongly from the attacks, which Yemen-based Houthi rebels claim to have carried out using drones, while U.S. officials suspected projectiles fired by Iran.
A few were of the opinion that the Saudi government was eager to give its oil industry a quick clean bill of health in order not to disrupt the impending IPO of Aramco.
“The IPO is all-important to the Saudis and they can’t let it sink now,” said John Kilduff, partner at New York energy hedge fund Again Capital. “Also, this attack is a huge embarrassment for them and they need to put up a brave face against the Houthis and the Iranians.”