Exxon Mobil, BP and other oil stocks are surging after strikes on Saudi oil fields wiped out half of the Kingdom's oil output
- Oil stocks are surging on Monday after strikes on Saudi oil fields damaged roughly half of the Kingdom's oil production.
- Exxon Mobil surged in premarket 3.6% while BP and shell also rallied in opening trading in Europe.
- In opening trading, Brent crude oil surged as much as 20% to nearly $72 a barrel, one of the biggest spikes on record.
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Oil stocks are surging on Monday after strikes on a Saudi Arabian oil field over the weekend disrupted roughly half of the Kingdom's oil supplies.
Brent crude oil shot up 20% on opening trading in Asia, marking one of the biggest spikes on record, later coming down to 8.3% by the time markets opened in Europe. At the time oil pushed to $72 a barrel, but later settled to about $65.
Exxon Mobil in pre-market was up 3.3% at 10:00 in London, (5:00 EST). The FTSE 350 oil and gas index also rose 3.3% as BP rose 3.8% and Shell 2.9%, which are both listed on the index.
Here is a list of stocks that are surging:
- Exxon Mobil: 3.3% in pre-market
- BP: 3.8%
- Shell: 2.9%
- Chevron: 3.4% in pre-market
- Kinder Morgan: 7.2% in pre-market
- Occidental Petroleum: 5% in pre-market
- Schlumberger: 5.8%
- Chesapeake: 14.4% in premarket
- Tullow: 9.8%
The price of oil is still surging and though unlikely, some analysts are saying that it could reach $100 a barrel, as half of Saudi's oil production capabilities or roughly 5% on the global supply have been affected.
"Three days ago, oil prices hitting $100 a barrel was almost an impossible scenario. Not anymore," said Hussein Sayed, chief market strategist at FXTM.
"That's not just because of the current disruption from Saudi Arabia, but the fact that the chances of military conflict in the region have risen dramatically. US Secretary of State Mike Pompeo blamed Iran for the drone attacks, and Republican Senator Lindsey Graham said the United States should consider an attack on Iran's oil refineries. Meanwhile President Trump warned that the US is 'locked and loaded'.
"If such statements continue to flow from the US administration, geopolitical risk premium would increase significantly as any strike against Iran may put the whole Gulf region in jeopardy," he added.
Saudi Aramco, the state-backed, oil company, is scheduled to go public later this year, with timing that may in doubt because of the attacks. It's been estimated that its IPO could raise as much as $100 billion.