Oil Jumps as Iran Tanker Blast Spurs Fresh Supply Fears

Friday,   11-Oct-2019   01:35 PM (IST)

Oil jumped back above $60 a barrel after a reported explosion on an Iranian tanker near the Saudi Arabian port city of Jeddah reignited fears that unrest in the Middle East threatens global supply. Futures jumped by almost $1 a barrel after the Islamic Republic News Agency reported a National Iranian Oil Company tanker caught fire after a blast, taking the day’s gains to more than 2%. Prices were already higher after U.S. President Donald Trump said talks with Chinese counterparts are going “really well” and that they will continue on Friday, offering a glimmer of hope for global demand. The tanker explosion will spur fresh concern about potential conflict in the world’s most important crude-producing region after attacks on ships and drones earlier this year, and most recently a strike on Saudi Arabian energy infrastructure. Oil is still down about 19% from its peak in April as the prolonged U.S.-China dispute adds to a bleak economic outlook. Brent crude for December settlement rose as much as $1.36, or 2.3%, to $60.46 a barrel on the London-based ICE Futures Europe Exchange. The contract is up 3.5% this week and traded at $60.44 a barrel at 7:37 a.m. in London. West Texas Intermediate for November jumped as much as $1.14, or 2.1%, to $54.69 a barrel on the New York Mercantile Exchange. The contract climbed 96 cents to $53.55 on Thursday, the highest level in more than a week. Prices are up 3.5% this week. Key Saudi Arabian oil-processing facilities were attacked on Sept. 14, a strike that curbed about 5% of global output and was blamed on Iran. In July, a U.S. ship down an Iranian drone, while oil tankers have been targeted in the Persian Gulf.