MarketsFarm — Following an attack on two major oil facilities in Saudi Arabia, consumers can expect a small rise in fuel prices in the days to come.
The attacks on Saturday hindered the production of about 5.7 million barrels of oil per day. On Monday morning, crude oil prices were up by about 10 per cent at about US$61 per barrel.
“It’s a trickle-down effect,” said Allison Mac, a petroleum analyst at Gas Buddy.
“Prices are going to increase very steadily over the next week or two.”
However, prices won’t increase as dramatically as they may have if the attack occurred in the middle of summer, when North American fuel consumption is at its peak.
“If this happened when demand was much higher, we’d see a sharper increase in prices,” she said. “But that’s not the case. If this attack didn’t happen, prices would be going down right now.”
Analysts expect gasoline prices to increase by between five and 12 cents per litre over the next two weeks.
As the largest oil-producing nation in the world, Saudi Arabia will “restock” the oil supply currently missing from the market.
“Once that’s up to speed, prices will go back down,” Mac said.
Canola prices were higher on Monday, partially due to stronger crude futures.
— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.