Oil rose as Saudi Arabia reported drone attacks on pumping stations, the latest escalation in Middle East tensions after tankers were hit by sabotage over the weekend.
Futures rose 1.2% in New York, reversing Monday’s drop. Unidentified drones attacked two pumping stations belonging to Saudi Aramco, forcing the state oil company to suspend operations in the area to assess what the kingdom said was “limited” damage. That follows damage to oil tankers anchored off the United Arab Emirates on Sunday.
Oil volatility has jumped this month as crude is buffeted by the specter of a full-blown trade war on the demand side, while a combustible Middle East and production disruptions from Norway to Nigeria are throwing the supply outlook into doubt. U.S. drilling activity and a pending decision by the Organization of Petroleum Exporting Countries and its allies on whether output curbs will be extended are taking a back seat to the various crises.
West Texas Intermediate crude for June delivery advanced 72 cents to $61.76 a barrel on the New York Mercantile Exchange at 12:13 p.m. London time. The contract closed down 62 cents at $61.04 on Monday.
Brent for July settlement was up 1.5% at $71.31 a barrel on the London-based ICE Futures Europe exchange, after losing as much as 0.4% earlier. The global benchmark contract is trading at a $9.38 premium to WTI.
Source : Bloomberg