Brent rallies to two-week high on Saudi supplies worries

Brent powered up in American trade to two-week highs, resuming the gains after a hiatus last Friday, amid concerns of a drop in Saudi supplies after suspending shipments through the Bab Al Mandeb strait in the Red Sea, adding to the expected hit to Iranian exports after US sanctions go into effect. 

As of 13:19 GMT, Brent rose to $75.00 a barrel from the opening of $74.29, with an intraday low at $74.11, and the highest since July 16 at $75.09. 

Brent closed down over 0.2% on Friday, the first loss in four days on transient profit-taking. 

Oil prices marked a 1.3% profit last week, the first such weekly profit in a month after Saudi Arabia halted crude shipments moving through Bab Al Mandeb, while US crude inventories hit 3-1/5 year lows. 

Saudi oil minister Khalid Al Faleh said in a press statement that Saudi Arabia is suspending all oil shipments through Bab Al Mandeb strait until navigation becomes safe, after two giant Saudi oil freighters were attacked by the Houthi rebels in Yemen, with each ship carrying two million barrels. 

Otherwise, analysts expect Iranian supplies to take a hit of 500 to 700 thousand bpd starting November when US sanctions officially take place. 

In fact, if US President Donald Trump upped his already strong pressure on countries that import crude from Tehran, supplies could fall by as much as 2 million bpd according to some forecasts.