Crude oil prices may remain range-bound around $60

Crude oil prices have receded from their recent highs – post-drone attack on Saudi Arabian oil facilities – thanks to the announcement that the damage has been repaired and supplies are gradually accelerating to pre-attack levels. September 30 is the date by which Saudi said it expected the situation to normalise, although there are sceptics who want more concrete evidence.

Concerns over tightening supplies have surely diminished for now. If indeed Saudi’s claim of supply normalisation is true, then there is no justification for a large risk premium on crude oil prices. Additionally, President Trump’s rants against Iran have not become any more aggressive than before, which suggests there may be no threat of further reduction in the already low Iran oil export.