Brent rises as conflict risks persist

The front-month ICE Brent contract has gained $0.89/bbl on the day from Friday, to trade at $110.04/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent crude has opened the week on a firmer footing as instability in the Middle East continue to underpin oil prices.

Regional oil producers, including Saudi Arabia and the UAE, reported new drone strikes over the weekend, intensifying the ongoing US-Israel standoff with Iran.

The UAE’s Ministry of Foreign Affairs has condemned the attack which targeted an electricity generator in the Barakah Nuclear Power Plant in Al Dhafra region.

The strike was “carried out by a drone that entered the country’s territory from the western border direction,” the UAE’s foreign affairs ministry said in a statement.

“If anything, re-escalation risks are increasing, with a drone strike on the UAE’s only nuclear power plant over the weekend,” two analysts from ING Bank noted.

Downward pressure:

Brent crude’s price has felt some downward pressure after Baker Hughes reported a rise in US crude oil rig activity.

The total number of rigs drilling for crude oil in the US rose by five to 415 units last week.

The US oil rig count is seen as an indicator of future oil production. It reflects how much oil drilling activity is happening or expected to happen in the shale sector.

By Aparupa Mazumder

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