08.03.202119:20:00UTC+00Crude Oil Prices Pull Back Sharply After Initial Spike

After moving sharply higher in early trading in reaction to reports of attacks on Saudi Arabian facilities, the price of crude oil showed a significant downturn over the course of the session on Monday.

Crude for April delivery slumped $1.04 to $65.05 a barrel after reaching an intraday high of $67.98 a barrel earlier in the day, the highest since October 2018.

Profit taking may have inspired traders to cash in on the recent increase in the price of crude oil following the early spike.

The initial upward move came Saudi Arabia said some of the world's most protected oil infrastructure came under missile and drone attack on Sunday in an escalation of regional hostilities, raising concerns about Saudi Arabia's air defenses and the expanding capabilities of the Iran-backed Houthi rebels.

The official Saudi Press Agency quoted an anonymous official in the Ministry of Energy as saying that a drone flew in from the sea and struck an oil storage site in Ras Tunura, the port run by Saudi Arabia's state oil company, Aramco.

The Ministry of Energy denounced the strike as "an act of sabotage" targeting not only Saudi Arabia "but also the security and stability of energy supplies to the world." Meanwhile, oil output appeared to be unaffected.

Meanwhile, traders were also reacting to news the Senate voted along party lines on Saturday to approve a new $1.9 trillion coronavirus relief bill.

The bill, which includes $1,400 direct payments and an extension of unemployment benefits, is expected to be approved by the House later this week.