As quickly as the market rallied, oil prices and oil-related stock prices careened lower Sept. 17 as reports of a swift return of Saudi Arabian oil production helped calm the jittery markets.
Brent crude oil prices ended the Sept. 17 session 6.5% lower at $64.55 per barrel, while West Texas Intermediate crude oil prices settled 5.7% lower at $59.34/bbl amid news that most of the production could be restored within a few weeks after surprise attacks on Saudi Arabian Oil Co.s infrastructure.
The Sept. 14 drone attacks, which targeted the Abqaiq processing facility and the Khurais oil field, knocked out 5.7 million barrels per day of Saudi Arabia's production, equal to about half of the kingdom's production and more than 5% of the world's supply of oil.
Brent and West Texas Intermediate prompt-month oil futures surged Sept. 16, ending the week's inaugural session up close to 15% each.

Saudi Arabian Oil Co., or Saudi Aramco, is already well on its way to restoring the flow of oil. The company expects to restore production capacity to 11 million bbl/d by the end of September and recover its full capacity to 12 million bbl/d two months later, S&P Global Platts reported Sept. 17, citing Saudi Energy Minister Prince Abdulaziz bin Salman.
The world's biggest oil exporter has already restored more than half the oil production capacity damaged in the attacks, Platts said.
The subsequent drop in oil prices helped temper gains posted in the equities markets as the S&P oil and gas exploration and production index dropped 5.6% on Sept. 17, just one day after rallying 10.8% higher Sept. 16. The share price of Whiting Petroleum Corp., which surged almost 50% on Sept. 16, closed more than 16% lower Sept. 17. The share price of Chesapeake Energy Corp., which jumped by more than 17% on Sept. 16, was down more than 14% on Sept. 17.
While the oil complex returned some of its initial spike, the market will likely hold a premium amid an elevated geopolitical threat, S&P Global Ratings said in a Sept. 16 report.
Even with returning production, market pundits believe that oil prices will rise $3/bbl to $5/bbl, Ratings said. The gains reflect a risk premium regarding market concerns about the kingdom's ability to protect its oil interests and maintain reliable supplies, Ratings said Sept. 17.
"What was a risk scenario has become a reality," IHS Markit Vice Chairman Daniel Yergin said Sept. 17.
However, the back end of the futures curve has moved up nominally by a few dollars, "indicating investors are taking a wait and see approach," S&P Global Ratings said.
The rating agency assumed Brent prices will hold near $60/bbl through the end of 2019 and throughout 2020 while West Texas Intermediate prices will hold near $55/bbl during the same time frame.
S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.
