Saudi Arabia says its oil pipeline was hit by drones
An oil pipeline that runs across Saudi Arabia was hit by drones Tuesday west of its capital of Riyadh, the Saudi energy minister said, shortly after rebels in Yemen claimed they carried out coordinated drone strikes against the kingdom. The attacks followed reports of sabotage against oil tankers in the Persian Gulf off the coast of the United Arab Emirates on Sunday, with tensions rising between the U.S. and Iran. Click here to read more from CBS News.
Large Crude Build Weighs On Oil Rally
The American Petroleum Institute (API) reported a large surprise build in crude oil inventory of 8.6 million barrels for the week ending May 10, coming in significantly over analyst expectations of a 2.125-million-barrel drawdown in inventories. Including this week’s data, the net build is now 29.52 million barrels for the 20-week reporting period so far this year, using API data. Click here to read more from OilPrice.com.
China is going easy on American oil (for now). Here’s why
US oil has so far been spared China’s tariff wrath even as the deepening trade war ensnares other American commodities. China hasn’t been shy about targeting everything from liquefied natural gas and cotton to soybeans. Although China has tapered its purchases of US oil, officials there have so far avoided placing outright tariffs on crude from the world’s leading producer. The decision to go easy on US oil reflects Beijing’s desire to keep its options open, especially as crude supplies from Venezuela and Iran dwindle and tensions in the Middle East rise. Click here to read more from CNN.
Oil Bulls Won’t Get Lasting Support From Perceived Iranian Risk Premium
Before the U.S. became the global crude oil market’s buffer producer courtesy of its shale revolution roughly half a decade ago, Wall Street routinely factored in $5-$10 per barrel risk or geopolitical premiums, at the mildest of triggers. This was predicated on an extreme and sudden upending of the supply-demand equilibrium in a world with little spare capacity. But that was then – right now the U.S. is the world’s largest oil producer pumping ~11 million barrels per day (bpd); a shift that is unlikely to end anytime soon, according to the International Energy Agency (IEA). Click here to read more from Forbes.