However, analysts use the occasion to maintain their gloomy outlook for the commodity: File Image/Pixabay
In the second of the most spectacular and unforeseen events to rock the crude trading world in as many days, Saudi Arabia on Tuesday announced that it has already restored its oil supplies to customers and production will be back to normal by the end of September.
The comments come after a weekend attack on the kingdom's facilities knocked out 5 percent of global oil output and caused experts to guess that restoration might take months.
Traders who in the previous session responded to the attack - said to be caused by Iran - by boosting Brent prices to their highest level in over 30 years this time did an about-face and sent prices plummeting by 6 percent.
Caroline Bain, Capital Economics
We will not be rushing to revise up our oil price forecast of $60
Brent sank $4.47, or 6.5 percent, to settle at $64.55 per barrel, while West Texas Intermediate fell $3.56, or 5.7 percent, to settle at $59.34 per barrel.
Although the Saudis' news obliterated the numerous calamitous predictions by the analytical community of how a 5 percent loss in global output would affect different countries, pundits on Tuesday used the restoration to justify their previously-held outlooks of depressed prices due to oversupply and weak demand.
Caroline Bain, chief commodities economist for Capital Economics, stated in a note, "The latest news means that we will not be rushing to revise up our oil price forecast of $60 per barrel at end-2019; that said, there remain some important questions to be answered about the attacks, which may mean that we will have to consider a permanently higher risk premium in our price forecasts."
Meanwhile, U.S. president Donald Trump on Tuesday said he did not think it would be necessary to release oil from the Strategic Petroleum Reserve after all, pointing out that oil prices have not spiked very much: "I don't think we need it."
Saudi Arabia's stunning rebound came after drone and missile attacks early Saturday morning shut the 5.7 million barrels per day (bpd) capacity of the Abqaiq and Khurais processing facilities, the former being the world's largest processing facility; on Tuesday, energy minister prince Abdulaziz bin Salman told media that 50 percent of the disrupted crude production has been restored in the past two days, production capacity would reach 11 million bpd by the end of September, and 12 million bpd would be achieved by the end of November.
He added that crude exports won't decrease because inventory stocks will be drawn down in order to meet export commitments.