Oil gains for fifth straight session on rising Mideast tensions/Reuters

Reuters | August 12, 2024 | 11:35 PM IST | Breaking News | Follow on Google News

Oil gains for fifth straight session on rising Mideast tensions

Oil gains for fifth straight session on rising Mideast tensions

By Laila Kearney

August 12, 202411:02 PM

NEW YORK, Aug 12 (Reuters) – Oil prices were up by more than 2% on Monday, gaining for a fifth consecutive session on intensifying conflict in the Middle East that could tighten global crude oil supplies.

Brent crude futures were up $1.81, or 2.3%, at $81.47 a barrel by 1658 GMT. U.S. West Texas Intermediate crude futures rose $2.21, or 2.9%, to $79.05.

The U.S. Defense Department said over the weekend that it will send a guided missile submarine to the Middle East as the region braces for possible attacks on Israel by Iran and allies.

“We’re piling assets one on top of the other and giving the impression that, if this turns hot, it could also turn ugly,” said Bob Yawger, director of energy futures at Mizuho in New York.

Iran and Hezbollah have vowed to retaliate for the assassinations of Hamas leader Ismail Haniyeh and Hezbollah military commander Fuad Shukr. An attack could widen the Middle Eastern conflict, while tightening access to global crude supplies and boosting prices.

Such an assault could lead the United States to place embargos on Iranian crude exports, potentially affecting 1.5 million barrels per day of supply, Yawger said.

Meanwhile, Israeli forces continued operations near the southern Gaza city of Khan Younis on Monday following an airstrike over the weekend on a school compound that killed at least 90 people, according to the Gaza Civil Emergency Service. Israel said the death toll was inflated. Hamas cast doubt on its participation in new ceasefire talks on Sunday.

“We see higher prices this week that could advance the crude benchmarks further by around $3/bbl,” said oil analyst Jim Ritterbusch of Ritterbusch and Associates in Florida in a note.

Brent gained 3.7% last week while WTI rose 4.5%, buoyed by stronger-than-expected U.S. jobs data that fed hopes for an interest-rate cut in the world’s biggest consumer of crude oil.

“Support is coming from last week’s better-than-expected U.S. data, which eased fears of a U.S. recession,” said IG markets analyst Tony Sycamore.

Reuters