Brent surges as Middle East tensions show no signs of easing
The front-month ICE Brent contract has spiked by $21.61/bbl on the day from Friday, to trade at $106.80/bbl at 09.00 GMT.
IMAGE: An oil storage facility. Getty Images
Upward pressure:
Brent crude’s price has climbed above $100/bbl as the conflict in Iran continues to show no signs of de-escalation.
Oil prices could move higher to as much as $150/bbl if the highly critical Strait of Hormuz remains closed to tankers, Qatar’s Energy Minister Saad al-Kaabi said in an interview with Financial Times.
“Oil prices are surging after Qatar’s Energy Minister has issued dire warnings that is sending shockwaves through global energy markets,” Price Futures Group’s senior market analyst Phil Flynn said.
There is also news that finance ministers from the G7 group of developed countries will discuss a joint release of oil from emergency reserves coordinated by the International Energy Agency (IEA).
“No signs of de-escalation in the war means the market is having to aggressively price in a prolonged supply disruption,” two analysts from ING Bank noted.
Downward pressure:
The total number of rigs drilling for crude oil in the US rose by four to 411 units last week, according to Baker Hughes.
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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