(New York) Oil prices, down most of the day, finally ended higher on Friday after a huge fire broke out at oil facilities in Jeddah, Saudi Arabia following attacks by Yemeni rebels .
Updated yesterday at 4:16 p.m.
A barrel of Brent North Sea oil for May delivery ended up 1.36% at $120.65.
A barrel of West Texas Intermediate (WTI) for same-month delivery rose 1.42% to $113.90.
During the day, prices remained in the red, an embargo of the European Union on Russian hydrocarbons because of the invasion of Ukraine by Moscow being for the moment avoided after a summit of the 27 member countries.
But shortly after 4 p.m. GMT, the black gold price curve reversed rapidly as Yemeni Houthi rebels claimed responsibility for a series of attacks in Saudi Arabia in a statement.
One of them targeted an Aramco refinery in the industrial city of Yanbu on the Red Sea, a hundred kilometers north of Jeddah, causing a gigantic fire.
These attacks came on the eve of the seventh anniversary of the intervention of a military coalition led by Riyadh in Yemen to fight the Houthi rebels, close to Iran.
“Prices went up as soon as we heard about the explosion near Jeddah. This has renewed fears about the vulnerability of infrastructure in Saudi Arabia,” commented John Kilduff of Again Capital.
“Also the fact that it happened just before the weekend when the markets are closed, investors rushed higher to hedge when there will be no trading for two days,” he said. explained the analyst. “Those gains could evaporate as early as Monday,” he suggested.
Before this fire in Saudi oil installations, the eyes of the market were mainly riveted on the aftermath of the NATO, G7 and European Union summits, which were held on Thursday in Brussels, a month after the outbreak of the crisis. Russian invasion of Ukraine.
The G7 and European Union countries will sanction any transaction involving Russia’s gold reserves, to prevent Moscow from circumventing the financial isolation measures taken by the West, they announced.
But the sanctions do not include for the moment a European embargo on Russian hydrocarbons, the Old Continent still being very dependent on it.
Russian imports provide Europe with 40% of its natural gas needs and 30% for oil.
Some European nations are more exposed than others: 55% of German gas imports before the war, as well as the bulk of supplies to Finland, Hungary and the Czech Republic, come from Russia.
“However, the question [d’un embargo sur l’énergie russe] will likely resurface as long as the war between Russia and Ukraine continues, and the resurgence of this topic could help drive oil prices back to recent highs,” Exinity analyst Han Tan warned.
In the meantime, the United States and the European Union announced on Friday the creation of a working group aimed at reducing Europe’s dependence on Russian fossil fuels.
The European Commission has also received a mandate from EU member countries to make grouped gas purchases, which will be “the best instrument to bring down the price” of this energy, French President Emmanuel Macron announced after of a European summit in Brussels.
“Group purchasing, the ability to define long-term contracts together, is the best instrument for lowering the price of our gas and therefore we have given the Commission a mandate to do so,” he said.