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Oil price posts biggest spike on record after Saudi facility attack: as it happened

Oil price makes biggest intraday jump since 1988 after Houthi drone attack on Saudi oil plants
Disruption could send prices soaring as high as $100 a barrel
Donald Trump says US is locked and loaded to go after aggressor
European indices open lower as mood sours
Robin Pagnamenta:A tit-for-tat oil fight between Saudi Arabia and Iran will be bad news for consumers and the global economy
5:13PM
Wrap-up: Questions remain as strikes rattle markets
Oil price posts biggest spike on record after Saudi facility attack: as it happened

A Saudi spokesperson presents information about the drone attack

Credit:
REUTERS/STRINGER
Saudi Arabia has long been the bed rock of global oil production, but the weekends events and how markets have reacted shows just how unstablethat foundation can be.
By the barrel | The world's top 10 oil producers*
The aftershock ended a winning streak in European stocks, which had been rising for the last five sessions. Oil giants didwell, but that wasnt enough to stock the overall decline.
Thats all from me today Illbe back tomorrow with the latest news on markets, business and economics! Have a good night.
4:52PM
Round-up: Aldi ramps up London attack, Norwegian secures bondholder deal, Thomas Cook wins reprieve on rescue deal
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Aldi could open up to 250 stores in and around London by 2025

Credit:
Joel Chant
With markets now closed, heres anotherbatch of the UKs biggest business stories:
Aldi ramps up assault on London grocery market:Aldiis planning to expand aggressively in London and the South East despite a fall in profits, as aprice war with rivals continued to rage.
Norwegian Air wins breathing space with ?300m bondholder deal:Norwegian Air has struck a deal to restructure more than ?300m of debts, giving the heavily indebted airline breathing space on its questto return to profitability.
Thomas Cook wins breathing space to secure backing for ?1.1bn rescue deal:Thomas Cook has secured an extra week to hammer out a ?1.1bn rescue deal, as debt speculators pile pressure on the troubled holiday company.
4:48PM
European stocks close down after day of worries
Well, it started out bad and never got much better: European stocks have closed red across the board.
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Credit:
Bloomberg TV
How things move in coming days is likely to depend on what comes out of Saudi Arabia, particularly whether Riyadh is confident enough to stick the blame for the attack directly on Tehran. Donald Trump is certainly pointing a finger at the Islamic Republic...
Remember when Iran shot down a drone, saying knowingly that it was in their airspace when, in fact, it was nowhere close. They stuck strongly to that story knowing that it was a very big lie. Now they say that they had nothing to do with the attack on Saudi Arabia. Well see? Donald J. Trump (@realDonaldTrump) September 16, 2019
4:30PM
Full report: Chinese economy slows again as trade war bubbles on
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Chinese state council premier Li Keqiang

Credit:
Andrea Verdelli/POOL/EPA-EFE/REX
Chinese industrial production grew at its lowest rate since 2002, according to figures released by the Asian economic giant this morning. Tim Wallace has a full report. He writes:

Premier Li Keqiang admitted China may now miss its goal to keep the economy growing by more than 6pc ayear.
For China to maintain growth of 6pc or more is very difficult against the current backdrop of a complicated international situation and a relatively high base, and this rate is at the forefront of the world's leading economies, he said in a Russian interview.
You can read morehere:Chinas economy slows again as trade war threatens global slump
4:14PM
Thomas Cook schedules hearings on recapitalisation for later in the month
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Thomas Cooks future remains in doubt

Credit:
Thomas Cook/PA
Beleaguered travel operator Thomas Cook says it will hold meetings between its creditors and shareholders at the end of the month, as it tries to secure a rescue package worth ?1bn. The company said:

As part of the process to finalise the full commercial terms between Thomas Cook Group's creditors and stakeholders, the Scheme Meetings and the Schemes Sanction Hearing relating to Thomas Cook Group's proposed recapitalisation will take place on the 27 and 30 September respectively.
The Company continues to target implementation of the recapitalisation in early October.
4:09PM
Wall Street downbeat as global tensions bubble
Trading in New York has been open for just over an hour now, and indices are looking pretty solidly downbeat. The Dow is off about 0.5pc, while the S&P 500 and Nasdaq have both dropped about 0.3pc.
In Europe, things look similarly grim: the FTSe is 0.3pc off, with Germanys DAX and Frances CAC both shedding about 0.6pc.
3:45PM
Meanwhile, in Luxembourg...
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Luxembourg's Prime Minister Xavier Bettel gestures during a news conference after his meeting with British Prime Minister Boris Johnson in Luxembourg

Credit:
YVES HERMAN/REUTERS
Boris Johnson has cancelled a press conference with the Prime Minister of the tiny Principality after being booed. Follow the latest on our politics live blog:
Brexit live:Johnson cancels press conference with Luxembourg PM after being booed
2:54PM
Saudis say weapons used in attack came from Iran
Just in: The spokesperson for the Saudi-led coalition in Yemen has said preliminary findings from its investigation into Saturdays attacks suggest Iranian weapons were used.
Though they did not go as far as directly blaming Iran for the attack, they said it did not come from Yemen.
2:43PM
Bumper round-up: Chinese media attack LSE takeover bid, Cobham investors back takeover, Eddie Stobart warns of cash squeeze, PwC cranks up pay, Man Group finds its new guy
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Big Four accounting giant PwC is paying ?765,000 to each of its 913 partners

Credit:
Jack Taylor/Getty Images Europe
Heres an (unusually bulky) round-up of the days biggest business stories:
Chinese state media blasts Hong Kong bid for London Stock Exchange:Chinese state media has seized on the rejection by the London Stock Exchanges of anunsolicited ?30bn takeover bidby the Hong Kong bourse.
Cobham investors back ?4bn Advent takeover:Cobham investors have overwhelmingly approved the ?4bn takeoveroffer byAmerican private equity firm AdventInternational, drawing a close to a bitter battle that resulted ina campaign by the aerospace giants founding family to block the deal.
Eddie Stobart warns of cash squeeze as profits flounder:Eddie Stobart added to a lorry-load of woes by warning that profits would be significantly below expectations.
PwC partners set for ?765,000 payday:PwC partners are set for a bumper pay day after the Big Four accounting firm revealed strong revenue and profit growth as part of its 2019 annual results.
Ex-Deutsche chief John Cryan to chair Man Group:Former Deutsche Bank boss John Cryan will take over as chairman of Man Groupafter Ian Livingston said he would leave the fund manager at the end of the year.
Economic Intelligence newsletter SUBSCRIBER (article)
1:57PM
Aramco IPO under threat?
Could the multi-billion dollar flotation of oil giant Saudi Aramco be derailed by the attacks on oil refineries? The Wall Street Journal is reporting that Saudi officials are wondering whether investors will get cold feet over fear of further attacks.
The IPO could value Aramco, the national oil producer, at up to $2 trillion. But according to the Journal:

The attacks could now also figure in any investor valuation. If Aramco continues to be a target of attacks, some Saudi officials and advisers say the market might need a further discount of as much as $300 billion.
1:08PM
Meanwhile, in China...
The Hong Kong stock exchange's shock bid for its London counterpart was the big story of last week. The controversy rumbles on. Sophia Yan in Beijing reports that Chinese state media is not happy about the deal:

The Peoples Daily, a Communist Party mouthpiece, published a scathing commentary giving a laundry list of reasons as to why the LSE would rebuff Hong Kong Exchanges and Clearing (HKEX), given persistent worries over ongoing political unrest, a lack of strategic vision, and a lowball bid.
LSEs rejection is a sign that Hong Kong cannot break away from the mainland and develop on its own without the support of a China brimming with opportunities, according to the piece.
It also praised the LSE for identifying its existing tie-up with the Shanghai Stock Exchange as its preferred way to access the market in China. The LSE wont worry about Shanghai ... as long as China continues to rise, so will Shanghai.

Sophia has more here.
12:36PM
'Straw that breaks the camel's back'
Here's Ivan Petrella, of Warwick Business School, on the oil price spike:

"High oil prices are clearly an unwelcome event in the current economic climate, especially if they stay at this level for a prolonged period of time.
"With the economy already showing clear signs of slowing down in most developed and developing countries, high oil prices could be the straw that breaks the camel's back contributing to a recession.
"Central banks around the world will be forced to rethink their current policy stance if this rise in oil prices is passed onto the public through inflation."
12:15PM
Analyst: US military escalation not going to happen
Brent crude prices are holding steady at just under 9pc up.They spiked to 20pc up early this morning when Asian markets opened, which was the first chance traders had to react to the attacks over the weekend.
US Energy Secretary Rick Perry has joined the voices pinning the attack directly upon Iran, calling them unacceptable.
Despite the sabre-rattling in Washington, OANDAs Edward Moya writes:

It will take a lot to disrupt the bull case for US stocks and the todays selloff that stemmed from the Saudi oil field attacks could see buyers eventually re-emerge. The possibility of a US military escalation remains a key risk but that is probably not goingto happen. President Trumps 2020 re-election bid cannot stomach a war and we should not be surprised if we continue to hear tough talk, and possibly further escalations in the Persian Gulf, with maybe a couple US coordinated air strikes that will look to avoid any loss of life.
With the Fed likely to deliver a few more rate cuts and with the recent progress in the trade war, we should see limited downward pressure with US equities.
Oil stocks could have a nice couple of days, while airline and cruise line stocks could see some pain. Geopolitical risks will increase calls for a trading range or even for another pullback.
12:04PM
Heres where the strikes against Saudi oil facilities took place
Strikes against Saudi oil plants
Heres a reminder of how things stand
Prime Minister Boris Johnsons spokesperson has called the attacks a wanton violation of international law, adding: The UK is concerned abut this behaviour and stands firmly in support of Saudi Arabia.
11:46AM
Todays oil price spike looks less significant in the longer run...
...but just how long it takes for Saudi Arabia to rebuild capacity could be the key test.
11:28AM
Watchdog chief Bailey: City needs to do more to prepare for Brexit
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Andrew Bailey spoke at Bloombergs London headquarters this morning

Credit:
Jason Alden/Bloomberg
The financial services industry has more work to do to ensure an orderly Brexit,Financial Conduct Authority head Andrew Bailey said in a speech this morning.
My colleague Harriet Russell reports:

Bailey outlined seven outstanding issues during a speech at Bloomberg headquarters in London, despite saying that preparations for a no-deal Brexit had advanced over the course of this year
Mr Bailey said there were a number of issues that require further action, includinga possible overlap in share trading rules, which he said had the potential to damage market liquidity to no good end.

The FCA, Harriet adds,hasfaced criticismfor its role in protecting customers in several financial scandals this year, including the collapse of mini-bond seller London Capital & Finance, peer-to-peer company Lendy andthe suspension of Neil Woodfordsflagship equity income fund.
You can read her full report here:Watchdog warns further actionneeded to get City ready for Brexit
11:24AM
Cobham vote passes
Just in from the Cobham takeover deal meeting: voting on Advents takeover offer was 93.1pc in favour, 6.9pc against. More when I get it...
11:18AM
St Jamess Place shares slip as partners losecruises-and-cufflinks bonus scheme
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Britains largest wealth manager has been criticised for its staff reward programme

Credit:
ANDREA MEROLA/EPA
Shares in wealth manager St Jamess Place have slipped almost 4pc this morning, after further reporting about its plans to cut down on lavish rewards for its advisers.
In a call to its advisers or partners leaked to the Sunday Times, boss Ian Gascoigne said the company was likely to cut its bonus scheme.
Earlier this month, Telegraph Money reported that St Jamess Place had begun reviewing its incentives program as part of plans to modernise.
Read more here: St Jamess Place to scrap controversial cruises-and-cufflinksincentives for financial advisers
11:05AM
Full report: Trump says US is locked and loaded as talk hopes cool
Oil price posts biggest spike on record after Saudi facility attack: as it happened

US President Donald Trump (left), and Iranian President Hassan Rouhani

Credit:
NICHOLAS KAMM/AFP
The Telegraphs middle east correspondent Josie Ensor has a full report on how things stand between the US and Iran following the weekends events. She writes:

US President Donald Trump and Iranian counterpart Hassan Rouhani appeared to back away from the prospect of talks on Monday, after an attack on a Saudi Arabian oil facility blamed on Tehran sent oil prices soaring...
...The Houthis, a Shia group aligned with Iran fighting Saudi-backed forces in Yemen, claimed responsibility for the attack and said it had the oil field locked in its crosshairs.
However, experts and officials say it was unlikely to have been the Houthis, who lack the capability to carry out such a highly orchestrated attack on the kingdom.
This wasnt done by an amateur, to put it very mildly, tweeted Carl Bildt, co-chair of the European Council on Foreign Relations . It was a massive and highly sophisticated attack.
You can read her full report here:Donald Trump and Hassan Rouhani back away from talks as US is locked and loadedafter Saudi oil attack
10:56AM
Sound investment? A battle lies ahead for HMVs new owner
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Canadian music mogul Doug Putman

Credit:
John Rennison/The Hamilton Spectator
When HMV teetered once more of the brink of total shutdown earlier this year, it was Canadian masuic mogul Doug Putman who stepped in to rescue to ailing retailer.
Retail correspondent Laura Onita has spoken to him about hisplans for the trouble-prone company. She writes:

Music retailers have found it tough over the years to stay afloat because of high costs, a fall in sales and the rise of download and then streaming services that have made CDs obsolete.
Putman nevertheless is optimistic. Last week he unveiled plans for the so-called Vault, a cavernous shop in Birmingham, previously home to furniture seller Ikea. It is so big that when it will open its doors next month, it should be one of Europes largest entertainment stores, if not the largest, with tens of thousands of titles and live gigs on the cards.

Does the HMV dog have a another day in it? Read more here:Challenges lie ahead in fight to save HMV under new Canadian owner
HMV Timeline
10:45AM
Reuters: Return to normal production may take months
Reuters has heard from sources that it could be months before Saudi Arabia can return to full production capacity.

Saudi Aramcos full return to normal oil production volumes may take months, two sources briefed on the companys operations said on Monday, after attacks on Saudi oil plants knocked out more than half of the countrys output.
It is still bad, one source said.
On Sunday, an industry source briefed on the developments told Reuters that Saudi Arabias oil exports will continue as normal this week as the kingdom taps into stocks from its large storage facilities, but that Aramco may have to cut exports later if the outage in output continued for long.

Its still too early to measure what the long-term disruption of the Abqaiq attack will be, but this is how the numbers look currently (complete with useful preamble, courtesy of Wood Mackenzies Ed Crooks):
A good chart showing the history of oil supply disruptions, from @JavierBlas and colleagues at Bloomberg pic.twitter.com/AfNKDqOrvv Ed Crooks (@Ed_Crooks) September 16, 2019
10:27AM
Oil price holds steady around 9pc up
The price of oil, which registered its biggest intraday spike ever (about 20pc) as Asian markets opened in the wee hours of this morning, is now up around 9pc.
That has left the price at around $66 a barrel, which is where it stood in mid-July.
Its worth remembering August was a tough month for the black liquid, as trade war wobbles raised fears of slowing demand.
10:12AM
Avon Rubber bounces forward with revenues expectations holding
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Avon Rubber supplies tactical equipment to police and military forces

Credit:
Christopher Jones
Continuing what has been an unusually military-heavyblog, Avon Rubber has posted a trading statement ahead of its twelve-monthresults, saying it expects revenues to grow by 4pc for the full year.
The firm, which supplies tactical equipment to police and military forces, said it had experienced a strong year, with successful aircrew mask deliveries to the US Department of Defence a highlight.
It said strong law-enforcement performance had also bolstered its numbers.
Paul McDonald, its chief executive. said:

We are on track to deliver a strong set of results in what has been a transformational year forAvonRubber.

Jefferies analysts said:

We retain our positive stance on Avon. [Management] has again delivered in FY19F... The groups fundamentals look strong and we believe there is still plenty more to come from Avon.
9:51AM
Cobham shareholders set to vote on takeover bid
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Defence and aerospace supplier Cobham provides technology for governments around the world

Credit:
Chris Radburn/PA Wire
Cobham investors will vote today on a ?4bn takeover offer byAmerican private equity firm AdventInternational, my colleague Alan Tovey reports. He writes:

Advents 165p-a-share offer to delist the business, which has the backing of Cobhams board, needs the support of 75pc of shareholders at a meeting being held at City law firm Allen&Overy.
Investors are signalling they will approve the bid after no rival contenders emerged with better offers.
One major shareholder said: Its with reluctance. We were hoping someone else would stick their head above the parapet but it hasnt happened.
You can read his full report here:Cobham investors to vote on ?4bn Advent takeover
9:48AM
MJ Gleeson raises dividend after revenue rise
Oil price posts biggest spike on record after Saudi facility attack: as it happened

A builder lays bricks at a property development (stock photo)

Credit:
Chris Ratcliffe/Bloomberg
MJ Gleeson has raised its annual dividend following double-digit increases in its revenues and profit.
The low-cost housebuilder benefited from strong operational performance including a 25pc rise in unit sales for its Gleeson Homes division.
The company also announced it would maintain hold of its Strategic Land segment, which it had explored the idea of selling.
Peel Hunt Analysts called the results solid, putting the company on a Hold rating. They said:

We continue to like the relative defensive qualities of the business and growth outlook, but this is reflected in the share price
9:22AM
Spire Healthcare shares slip despite profit boost
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Nurses outside the Spire Nottingham Hospital
Shares in Spire Healthcare are down around 2pc currently, despite the small-caphospital operator posting a rise in profit to ?9.6m during the first half of the year.
Spire managed to turn around a ?2.2m loss for the same period last year, following cost-cutting and expectation-beating revenue from NHS referrals.
Justin Ash, its chief executive, said:

This was a good performance with clear signs of our strategic and operational initiatives bearing fruit. We promised 2019 would be a year of stabilisation with revenue growth, continued quality improvement, cash generation and net debt reduction. All have been achieved in H1, with good operating profit performance.
We saw growth in both private insurance and self-pay, with a particularly strong result in private insurance reflecting rising consumer awareness following our marketing campaigns

Liberum analysts said:

While today's update was very welcome given its patchy track record of earnings delivery, we still require more confidence that the market backdrop has stabilised before turning positive.
9:11AM
UBS: Attacks puts the heat back on over Iran
Oil price posts biggest spike on record after Saudi facility attack: as it happened

There had been hopes that Donald Trumps firing on national security adviser John Bolton (right) would ease tensions over Iran

Credit:
Chip Somodevilla/Getty Images North America
UBS analysts say the weekends events blow up any sense that relations between Washington, Riyadh and Tehran would soon settle. They write:

If nothing else a reassessment of risk pricing will likely presumably come in the aftermath of this attack. To take out over 5pc of global supply (in the country with the bulk of spare capacity) in a single strike a volume exceeding cumulative non-OPEC supply growth over 2014-2018 is highly worrying. The departure of National Security Adviser [John] Bolton last week was interpreted by many as a reduction in political risk this event may be significant magnitudes more consequential.
8:56AM
Houthis say Saudi Oil facilities will remain a target
Yemens Iran-backed Houthi rebels have said their weapons can reach anywhere in Saudi Arabia, and have vowed to continue targeting Saudi Arabian facilities.
In comments cited by the Houthi television station, the group which is at war with a Saudi-led coalition in Yemen said it the attacks on Saturday were carried out by planes with new engines, most likely in reference to drones.
Iran and the Persian Gulf
8:43AM
Market movements: Oil giants and arms companies gain, airlines slip
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Visitors look at a display model of a Saudi Air Force Eurofighter Typhoon jet, manufactured by BAE Systems, in Riyadh, Saudi Arabia, in February

Credit:
Mohammed Almuaalemi/Bloomberg
Oil giants Royal Dutch Shell and BP are the biggest risers on the FTSE 100 today, with British Gas-owner Centrica and arms manufacturer BAE Systems also finding gains.
94 of the blue-chip indexs 101 stocks are in the red, however, with British Airways-owner IAG the top faller.
On the mid-cap FTSE 250, airlines are also suffering, with Easyjet and Wizz Air both among the biggest drops. Predictably, energy firms Tullow Oil and Premier Oil are among the biggest risers.
8:34AM
Reaction and analysis: traders may be a little on edge for a while
Heres a sample of the reaction to this mornings oil price move.
Markets.coms Neil Wilson said:

This is a big escalation in terms of the scale and reach of these attacks so raises prospect of ongoing disruption and raises the geopolitical danger. Its going to add a massive risk premium to crude prices, so it will likely materially drive prices higher for a while.The big uncertainties right now for crude are 1) the extent of the outage, 2) how does this escalate, and 3) could there be more attacks of this kind. What is certain is the genie is out of the bottle in terms of risk premium.
The implications of these attacks are far-reaching and lasting, going well beyond the immediate disruption to albeit a very large portion of global output.It is a material escalation in the risks to supply and, in short, traders now worry that Saudi Arabian oil production can be swiftly and easily knocked out, which goes against everything wevecome to expect for the last 50 years.Saudi Arabia is supposed to be the reliable lynchpin, able to ramp production at will.Itindicatesongoing destabilization to global energy markets and will raise very real concerns about the Aramco IPO.
Biggest losers are oil consumers (and SJP|) pic.twitter.com/7O2EBXKjF1 Garry White (@GarryWhite) September 16, 2019
Jefferies Jason Gammel said:
If the Iranians have been driven to desperate measures from the loss of crude export revenues, an attack on Saudi capacity seems a likely response. The risk of wider conflict in the regions, including a Saudi or US response, will likely raise the political risk premium on crude prices by $5-10/bbl.
In a worst case scenario that resulted in a shutdown of oil transport through the Straits of Hormuz, oil prices could push through $100/bbl. We think this outcome is highly unlikely however, not least because important Iranian allies like the Chinese would be hit hard.
Saudi Riyal 12mth forwards set for biggest move since 2015 after attack of oil facility. Riyal has been pegged to US Dollar for decades, some traders use forward to speculate on the currency regime, BBG says. pic.twitter.com/SY6Pat5nkC Holger Zschaepitz (@Schuldensuehner) September 16, 2019
OANDAs Craig Erlam said:

The attack was as severe as it was unexpected but that's not the worst thing about it. Saudi Arabia believes a significant proportion of the outages can be back online in a few days while Trump also approved release of supplies from the Strategic Petroleum Reserve to ensure the market remains well surprised.
None of this should make us feel relaxed about the potential for further attacks though and the longer-term implications on the oil market. Spikes in oil prices when the global economy is already flirting with the idea of recession is not ideal and, if repeated and sustained, could ultimately be what tips us over the edge.
While oil prices have pared gains following the initial knee-jerk reaction to the reports, Brent and WTI remain around 10pchigher as the geopolitical risk premium keeps prices elevated. This may settle down if attacks are not repeated but traders may be a little on edge for a while, keeping oil trading at a premium for some time.
Business Briefing Newsletter REFERRAL (Article)
8:26AM
European stocks sink as oil attacks undercut rally
With markets finally getting a chance to react to the weekends oil attack shock, European equities are sliding slightly, losing some of the momentum they were building at the end of last week.
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Credit:
Bloomberg TV
7:56AM
Chinese data adds to market gloom
Its not just oil prices causing consternation.
MSCIs broadest index of Asia-Pacific shares outside Japan slipped 0.4pc, Reuters reports,after data showed China's industrial production growth unexpectedly fell to its weakest pace in 17.5years in August.
Painting a dour picture of the worlds second-biggest economy, Chinas statistics bureau said the country faces increasing downward pressure from external uncertainties.
China's blue-chip index eased 0.5pc, while Hong Kong's Hang Seng index faltered about 1pc, despite expectations Beijing will soon announce more support measures.
Liquidity was relatively thin with Japanese markets shut for a public holiday.
7:41AM
Biggest one-day move ever
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Smoke is seen following a fire at an Aramco factory in Abqaiq, Saudi Arabia, on Saturday

Credit:
REUTERS
State energy producer Saudi Aramco lost about 5.7m barrels per day of output in Saturdays attack after 10 unmanned aerial vehicles struck the worlds biggest crude-processing facility in Abqaiq and the kingdoms second-biggest oil field in Khurais.
For oil markets, it was the single worst sudden disruption ever, surpassing the loss of Kuwaiti and Iraqi petroleum supply in August 1990, when Saddam Hussein invaded his neighbour. It also exceeded the loss of Iranian oil output in 1979 during the Islamic Revolution, according to data from the US Department of Energy.
In an extraordinary start to trading on Monday, Londons Brent futures leapt almost $12 in the seconds after the open, the most in dollar terms since they were launched in 1988. Prices have since pulled back about half of that initial surge of almost 20pc, but were still heading for the biggest advance in more than three years.
Markets Hub - Brent spot
Saudi Arabia can restart a significant volume of the halted oil production within days, but needs weeks to restore full output capacity, people familiar with the matter said. The kingdom or its customers may use stockpiles to keep oil supplies flowing in the short term.
Aramco could consider declaring itself unable to fulfill contracts on some international shipments known as force majeure if the resumption of full capacity at Abqaiq takes weeks.
That would rattle oil markets and cast a shadow on Aramcos preparations for what could be the worlds biggest initial public offering. Its also set toescalate a showdown pitting Saudi Arabia and the US against Iran, which backs proxy groups from Yemen to Syria and Lebanon.
7:37AM
Trump: US is locked and loaded
Donald Trump tweeted yesterday promising to respond to the drone attack on Saudi Arabia:
Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed! Donald J. Trump (@realDonaldTrump) September 15, 2019
4:50PM
Agenda: Oil prices surge
Oil price posts biggest spike on record after Saudi facility attack: as it happened

Thick black smoke rising from Saudi Aramco's Abqaiq oil processing facility in Buqyaq

Credit:
Planet Labs Inc
Oil prices surged nearly a fifth after dronestrikes on two plants in Saudi Arabia knocked out more than 5pc of global oil supply.
The dollar fell while safe havens and currencies of oil-producing countries rallied on Monday, as Middle East tensions mounted.
Brent crude hit $66.31 a barrel in morning trading amid warnings prices at petrol pumps will rise.
Yemen's Iran-aligned Houthi group claimed responsibility for the damage, but the UShas pointed the finger directly at Iran.

5 things to start your day


1)Thomas Cook has secured an extra week to hammer out a ?1.1bn rescue deal, as debt speculators pile pressure on the troubled holiday company. A meeting had been scheduled for Wednesday to agree terms but has been moved to next week as Thomas Cook battles to survive.
2)No-deal Brexit planners fear panic buying could cause shortages of toilet roll and disposable nappies despite reassurances from supermarket bosses, Whitehall insiders have told The Telegraph.Short supplies of such essentials are viewed as a genuine prospect if consumers take fright at lack of other goods, they said.
3)Business investment will fall this year and again next year, dragging down economic growth and harming future productivity, the British Chambers of Commerce has warned. Companies are slamming the brakes on new projects illustrating the impact of the political turmoil and lingering unwanted prospect of no-deal exit, the business group said.
4)O2, the mobile phone giant, is set tobegin testing "smart ambulances"equipped withnext generation 5Gtechnologylater this month ina deal with Samsung and theNHS. Britain's biggest mobile network operator by number of users will pilot the technology onsix ambulances from the East of England Ambulance Trust.
5)The economist who predicted the US housing bubble that triggered the financial crisis has warned that cracks are emerging in the property market again.In an interview with The TelegraphRobert Shiller, the Nobel prize-winning economist,said a recent slowdown in price increases worryingly echoes trends in the American housing market before the bubble burst.

Coming up today


Royal Bank of Canada analysts struck an upbeat tone on Spire Healthcare ahead of its first-half results today. After analysing NHS data, they wrote that a positive surprise in H1 2019 was anticipated from the private hospital operator, adding we would buy into the results.
Interim results:City of London Investment Group, Horizon Discovery Group, Spire Healthcare Group
Full-year results:MJ Gleeson
Trading statement:Avon Rubber
Economics:Rightmove house prices (UK), Empire manufacturing (US)
See also:
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