UPDATE: Nothing to see here, move along...
- ARABIAN SECURITY SOURCE SAYS FIRE OCCURRED IN AN OIL PIPELINE, NOT TERRORIST ATTACK.
- FIRE BROKE OUT DURING REPAIERS, NOW UNDER CONTROL
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It appears Saudi markets are back in play. As Bloomberg's Richard Breslow noted this morning, Riyal forwards have jerked notably higher (implying weakness expected) and the Tadawul All Share Index has dropped 7% in the last 2 days after the killing of Shi'ites by unknown parties and now news that a pipeline has exploded. As Breslow warns, "if that indeed signifies the spread of Islamic State into Saudi Arabia, it would be the first time they crossed Saudi borders. That would be a big deal and a major escalation of problems over in that part of the world, far beyond what it would do to capital markets."
Yesterday there were attacks on Shi'ites (as Reuters reported)
Saudi security forces on Tuesday shot dead a member of an armed group that killed five people in an overnight attack on Shi'ite Muslims marking an important religious anniversary, al-Arabiya television reported.
The late Monday assault on a Shi'ite gathering in al-Ahsa district is likely to test already strained relations between Sunnis and Shi'ites across the Middle East because it coincided with the annual Ashoura commemoration of Shi'ite Islam.
The Dubai-based al-Arabiya said security forces who had been hunting suspects in the al-Ahsa attack clashed with and killed "a wanted man" at a rest area in the al-Qassim province, north-west of the capital Riyadh.
... and today, what is allegedly an Aramco pipeline, just exploded near the town of Sudair, south of Riyadh.
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Has sent stocks and the currency reeling.
And sparked a $2 surge in WTI crude
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It would appear the Saudis might need US 'protection' after all.. how convenient as they continue their attacks on the US Shale industry.
As OilPro adds, two other discussions are going around trading desks:
- This is a way to get oil prices to go back up without the Saudis appearing to give in and defend price by voluntarily cutting supply. A pipeline explosion will automatically decrease production.
- The US Elections are over, time for prices at the pump to go back up now. This plays on the long-tenured theory that gasoline prices tend to be lowest right before elections as the incumbent party leverages their power to please the masses.