Oil set for biggest weekly gain since January after Saudi attack

LONDON (Bloomberg) - Oil was on track for its biggest weekly increase since January as traders waited to see whether Saudi Arabia can fulfill promises to swiftly repair a critical processing facility attacked last weekend.

The world’s biggest crude exporter has vowed to restore its Abqaiq plant this month after an aerial strike composed of drones and missiles disabled 5% of global supply and triggered Brent’s biggest-ever one-day jump. Yet consultants such as Rystad Energy and FGE caution that recovery could take longer than expected, and the kingdom’s resort to sourcing refined fuels and condensates from the market is fanning concerns about the length of the disruption.

The ratcheting up of instability in the world’s most important oil-producing region has raised the risk premium for prices, which are almost $5/bbl higher than before last weekend’s attacks on the Saudi facilities. There’s also prevailing concern about how long it will take the kingdom to fully restore lost production, as it depletes inventories to meet supply commitments and operates without its usual buffer of spare capacity.