Oil holds most huge gains after Saudi attack, Fed moves into view

Oil prices dipped Tuesday but held most of the previous day's record gains following an attack on Saudi facilities that wiped out half the country's output, with traders nervously awaiting the US response after it said Iran was likely to blame.

The crisis revived fears of a conflict in the tinderbox Gulf region and raised questions about the security of crude fields in the world's top exporter as well as other producers.

It has also taken attention away from the upcoming trade talks between China and the US as well as a much-anticipated policy meeting of the Federal Reserve, which is expected to see it cut interest rates.

Trump said he was ready to help Riyadh following the strikes but would await a "definitive" determination on who was responsible.

Iran-backed Huthi rebels in Yemen have claimed responsibility but Washington and Riyadh have pointed the finger at Tehran, which denies the accusations.

Trump appeared to temper his earlier warning that the US was "locked and loaded" to response, saying: "I'm not looking to get into a new conflict, but sometimes you have to."
He said the most likely outcome would be more severe sanctions on Iran, though he pointed out: "What is clear is that Saudi Arabian oil infrastructure is more vulnerable than thought, and a risk premium will be built into oil prices going forward."