Saudi oil output to recover in weeks - sources

Panic in the oil market eased on Tuesday after Saudi sources said crude output would be restored sooner than expected.

A top Saudi source told Reuters oil output will be back on line within two to three weeks instead of months as first suggested.

Five percent of the world's oil production was knocked offline this weekend after an attack on key Saudi production facilities crippled more than half of Saudi oil production in the largest single supply disruption in half a century.

With supply concerns easing, global oil prices dropped about $4 or roughly 6 percent Tuesday, but prices remain elevated. Investors worry the attack on the Saudi facilities could set off a chain of events that sparks a confrontation between the region's two large enemies - Saudi Arabia and Iran - and drags in Saudi ally - the United States.

But cooler heads are starting to prevail in Washington, after saying the U.S. was "locked and loaded" to respond to Iran, President Trump later dialed that back and said there was "no rush" to action needed as partners work together to find out what really happened over the weekend.

A source told Reuters the Saudis are close to restoring 70 percent of the affected production.