Daily Caller
Yemen’s Houthi rebels took credit for targeting oil facilities in a drone attack that reportedly forced half of Saudi Arabia’s oil supply to shut down Saturday.
Ten drones struck two state-owned Saudi Aramco oil facilities, one of which is the world’s largest oil plant, in Saudi Arabia’s Eastern Province, according to people familiar with the attack, The Wall Street Journal reported.
Fires the strikes caused disrupted the production of 5 million barrels of oil per day, or about 5% of the daily global oil supply, which officials hope to restore by Monday, sources said. Saudi Arabia’s regular production level is 9.8 million barrels a day, CNN Business reported. More
Now there’s speculation of oil prices topping $100 a barrel. More
The oil being disrupted is still in the ground yet the disruption will be felt immediately in the supply chain for a product thats been sitting onshore and refined awaiting delivery and consumption for some time. Charge me more when that particular supply arrives.
But that’s not how it works, Different Tim. Oil is instantaneously priced at its perceived opportunity cost, aka the “Oh my god, there’s going to be a shortage!!” price – until market demand proves it won’t support it.
Production is interrupted and prices shoot up in two days. Production is trippled and prices don’t go down for three months.
I imagine it is how the futures markets work.
Oil a fungible and is priced at the price it takes to replace it. Otherwise, the sellers won’t have enough money to replace their oil and continue selling it.
As an example, assume you are a gold dealer making your living selling gold to the public. It’s like selling a bar of gold you intend to replace with a new one so you have stock to sell and remain in business. Are you willing to sell it for, say, the $500 you paid for it back when if a new one to replace it will cost you $1600? How will you have enough money to maintain a stock of gold bars to sell?
Just buy gold to shield yourself from declining dollar vs rising oil. [chart]
So, where did the drones come from??? Oh, yeah. Thanks to good old Obama.
My Cousin Dhimmi..
“The Hutes in question , we’re innocent”
Judge: “Hutes?”
Rumor is usually enough to disrupt the commodities market. They have a 10 day, 5% upset in supply and they set the house on fire. Business as usual.
Were it different, you couldn’t make a fortune in a market that was rational.
Take a look at the ‘crude oil trading’. You have people optioning a supertanker of light sweet crude that have no storage, refinery capacity, pipeline takeaway contracts or anything that would let them put that oil/gas into the consumer market. But they buy it. And sweat balls somebody with those capabilities above will buy it from them before that tanker makes landfall.
That’s bullshit. That’s built in instability. I’d rationalize that market by restricting bidders to those with the firm contracts to use it.
But I suppose that’s ‘anti-capitalist’ or some shit.
???? I thought the Empire crushed the rebels on Houth back in the 80’s.
100 dollar oil just what the deep state ordered to create a recession right before the election
They should enjoy this while it lasts.
Who wants to ban fracking when the Middle East is giving you another big red flag as to why we should limit ourselves from getting caught in the tangle of their Hatfield and the McCoys ass drama.
Thank a fracker.
So, oil two days ago, was about $55 per barrel. If 5% of the world supply is taken off-line, shouldn’t the price per barrel only increase by $2.75? Regular gas at the pump is around $2.80 per gallon. Why should it go up by more than 5%, or 14 cents?
Anonymous SEPTEMBER 15, 2019 AT 3:31 PM
Metals?
Been there done that. Remember when on almost every street corner with the vacant gas station turned into a “CASH FOR GOLD”? We were paying 2 to 2 1/2 times what everybody else was and making money doing it. Was better than sex (but then I’m OLD). You want insanity look at Palladium & Rhodium right not…
It’s going to be very interesting when they finally take delivery of the metal for replacing all the catalytic converters that they’re trying to avoid doing. The bottom will fall out on those two for sure.
Unprovoked attackers should be eliminated…..without due process.
I highly doubt the Houthis launched 10 drones that successfully traveled 300 miles to strike with pinpoint accuracy to take out exactly what was needed to cripple output for weeks or months. The other option would be that the drones were launched from Qatar or the UAE, or even from deep within Saudi, only having to travel a short distance and piloted to their specific targets by someone in or near the facility.
The Iranians have been pushing fake military technological wonders for months. Remember the wonder anti-ship missile that turned out to be a limpet mine attached from a rubber attack boat?
This smells like a commando raid and/or an inside job.
Either option is very embarrassing to the Saudi government.
Yeah, ACParker, they sound a bit more like Iranian cruise missiles. GPS-guided.
With all that friggin money and oil on the line you would think they could afford a system like this to protect it.
http://knuckledraggin.com/2019/09/sunday-video-7-4/#comments
Made a lot of parts for the Phalanx. Raytheon Missile and Space.