OIL PRICES JUMP 19 PER CENT YESTERDAY

Crude oil prices have surged more than 19 per cent after a drone strike on a Saudi Arabian oil facility wiped out about five per cent of global supplies.

Brent prices jumped as much as NZ$11.73 (FJ$16.27) to NZ$71.95 (FJ$99.83) a barrel in early trading in Singapore.

State energy producer Saudi Aramco lost about NZ5.7 million barrels per day of output on Saturday after 10 unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s secondbiggest oil field in Khurais.

For oil markets, it’s 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 exceeds the loss of Iranian oil output in 1979 during the Islamic Revolution, according to data from the U.S. Department of Energy.

New Zealand petrol prices could reach a nightmare NZ$3 (FJ$4) a litre following the attacks on Saudi Arabia’s oil facilities, economist Cameron Bagrie said today. However, the true impact the explosions would have on the oil industry remains to be seen. As of Monday morning, the “horror scenario” at this stage would see fuel prices reach NZ$3 (FJ$4) at the pump, economist Cameron Bagrie told MediaWorks.

If you look at the imported component of the petrol prices, it’s about NZ 75 cents (FJ$1.04).Let’s keep the maths simple, let’s say that oil prices basically double, that imported component will go from 75c to NZ$1.50 (FJ$2.08).”