11pm UPDATE

Wall St closes weaker as oil price surges after drone attack

Fires over the oilfields

Wall Street stocks closed weaker on Monday after a drone attack on two Saudi Arabian oil facilities sparked fears that a surge in crude prices could further erode the global economy.

The Dow Jones Industrial Average closed down 0.52% and the Nasdaq Composite ended the session 0.28% weaker. The S&P 500 was 0.31% firmer.

Oil prices surged after the attacks on Saturday which affected more than half the kingdom’s daily output. But moves by other producers to increase supply helped pare back prices.

After an initial 20% gain to $71.95 a barrel – a four-month high – Brent Crude was up 12.97% at $68.03 per barrel. West Texas Intermediate soared 12.76% to $61.85 per barrel.

Authorities battled huge fires after Yemen’s Houthi group were reported to have used drones to target the world’s biggest processing facility in Abqaiq as well as the Khurais oilfield. They were later identified as being sourced from Iran.

About 5.7m barrels a day of crude – more than half the kingdom’s daily production – was affected, accounting for 5% of global supply.

The attacks prompted speculation that the price could hit $100 a barrel and may also delay flotation of Saudi Aramco, the state-controlled oil giant.

US authorities blamed Iran for the attacks while President Donald Trump authorised the release of US reserves, allowing the price to stabilise.

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