Oil surges above $70 a barrel after attack on Saudi oil site

Brent crude oil surged more than two percent Monday following a missile attack on facilities owned by energy giant Aramco in Saudi Arabia, and on optimism about the demand outlook as the global economy recovers.

Brent crude, the international standard, surpassed $70 per barrel for the first time in over a year, gaining $1.14 to $70.47 a barrel. It surged $2.62 on Friday.

Benchmark US crude oil added $1.10 to $67.19 per barrel, up 1.7 percent, falling back from bigger gains earlier in the day. It jumped $2.26 to $66.09 per barrel on Friday.

Prices have been recovering in the past few months after plunging last year with the onset of the pandemic.

The devastating winter freeze that hit Texas and other parts of the southern United States last month knocked out production of roughly 4 million barrels per day of US oil, pushing prices above $60 a barrel.

Last week, with oil prices rising, some observers were expecting OPEC  and its allies to lift more restrictions and let the oil flow more freely. But OPEC agreed to leave most restrictions in place, despite growing demand.

“The last thing anyone wants in a recovering global economy is higher oil prices, and we are likely nearing a point when higher oil prices become a negative rather than a positive influence over risk assets,” Stephen Innes of Axi said in a report Monday.

Rising prices are a boon, however, for the oil industry, which has lost billions of dollars during the pandemic.

Natural resources consultancy Wood Mackenzie reports it is forecasting that oil prices will trade in the $70-$75 range in April and that global demand will increase in 2021 by 6.3 million barrels a day from a year ear