SINGAPORE (Reuters) - Oil prices were on track to jump more than 7% this week, their biggest weekly rise in months, on rising Middle East tensions after a key Saudi Arabian supply hub was knocked out in an attack last weekend.
A Saudi-led coalition launched a military operation north of Yemen’s port city of Hodeidah, as the United States worked with Middle East and European nations to build a coalition to deter Iranian threats after the Saudi attack.
Brent crude LCOc1 is on track to rise around 7% this week, the biggest weekly gain since January. The front-month November contract was at $64.53 a barrel, up 13 cents, by 0903 GMT.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 37 cents to $58.50 a barrel, set to post a gain of over 6% for the week.
“Investors should probably assume that oil stabilizes for now in the $60-65 per barrel range, though the risk is to the upside,” said Christopher Wood from Jefferies.
“The central message from the attacks is the vulnerability of the Saudi infrastructure”.
Saudi Arabia’s production dropped by almost half after the attack on Saturday, Sept. 14, crippled a major oil processing facility. Its oil minister has pledged to restore lost production by the end of this month.
The United States and Saudi Arabia blame Iran for the assault on Saudi oil facilities. Tehran denies any involvement.
In the United States, meanwhile, torrential rain from Tropical Storm Imelda has forced a major refinery to cut production and to shut a key oil pipeline, terminals and a ship channel in Texas.
Global markets are also keeping an eye on U.S.-China trade negotiations in Washington, as officials from both sides resumed face-to-face talks for the first time in nearly two months on Thursday.
