CME Market Sentiment Meter Historical Market Analyses – September 14, 2019 Abqaiq-Khurais Attack

By Anish Verma

In the year 2019, daily settlement prices (most active expiry) for WTI Crude Oil futures (CL1) rose as tensions with China and Iran grew from January to April. During this period, the Market Sentiment Meter (MSM) indicated Balanced market states.
Following a period of Conflicted market states in May, CL fell from 63.21 USD/bbl to 51.14 USD/bbl. The market state became Anxious and CL began to rise. In August, the prospect of trade talks diminished and the market state was Balanced. The MSM indicated that the market state remained Balanced for the rest of 2019.

On September 14th, 2019, there was a drone attack on the Saudi Aramco facilities located in Abqaiq and Khurais, Saudi Arabia. There was a rise in CL from 54.85 USD/bbl to 62.9 USD/bbl. The market state was Balanced prior to the attack. The risk-return the curve became skewed immediately after the attack. However, the market state remained Balanced. This rise in price was short-lived and fell the following day, a period of Balanced market states.