Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Oil rises over 1% as Mideast tensions face virus concerns

08/05/2021 | 03:33pm EDT
FILE PHOTO: Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub

NEW YORK (Reuters) -Oil prices rose more than 1% on Thursday on increasing Middle East tensions, but gains were capped as fresh restrictions to counter a surge in COVID-19 cases threatened the global energy demand recovery.

Brent crude oil futures rose 91 cents, or 1.3%, to settle at $71.29 a barrel, after earlier dipping below $70 for the first time since July 21. U.S. West Texas Intermediate (WTI) crude futures rose 94 cents, or 1.4%, to settle at $69.09 a barrel.

Both benchmarks fell more than $2 on Wednesday to a two-week low.

"Yesterday it was really all about concerns about the Delta variant, and then today there were worries that maybe we overdid it," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "We saw an increase in geopolitical risk as well."

Israeli jets struck what its military said were rocket launch sites in Lebanon early on Thursday in response to two rockets fired towards Israel from Lebanese territory, in an escalation of cross-border hostilities amid heightened tensions with Iran.

The exchange came after an attack on a tanker off the coast of Oman last Thursday, which Israel blamed on Iran. Two crew members, a Briton and a Romanian, were killed. Iran denied any involvement.

Asked if Israel was prepared to strike Iran, Israeli Defence Minister Benny Gantz told YNet news on Thursday "yes."

The growing tensions come as nuclear talks between Iran and Western powers that would ease sanctions on Tehran's oil exports appear to have stalled.

"With tensions brewing amongst Iran and world powers over last week's drone attack, it seems nuclear deal talks will be lengthy and unlikely to provide imminent sanction relief for Iran," said Edward Moya, senior analyst at OANDA.

Offsetting the geopolitical tensions, concerns over the recovery of global oil demand grew amid a surge in coronavirus cases.

Japan is poised to expand emergency restrictions to more prefectures while China, the world's second-largest oil consumer, has imposed curbs in some cities and cancelled flights, threatening fuel demand.

"China is now facing its most challenging COVID-19 crisis since the initial outbreak was brought under control," analysts at consultancy FGE said in a note on Thursday.

In the United States, the world's biggest oil consumer, COVID-19 cases hit a six-month high with more than 100,000 infections reported on Wednesday, according to a Reuters tally.

Analysts at investment bank UBS, however, said they expect oil prices to resume their upward trend despite pandemic concerns, projecting Brent crude will trade between $75 and $80 per barrel in the second half of 2021.

(Reporting by Stephanie Kelly in New York; Additional reporting by Ron Bousso in London and Jessica Jaganathan in Singapore; Editing by Marguerita Choy and Jason Neely)

By Stephanie Kelly


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
LONDON BRENT OIL 0.94% 78.01 Delayed Quote.46.73%
MSCI SINGAPORE (GDTR) 0.93% 6540.383 Real-time Quote.11.98%
S&P GSCI CRUDE OIL INDEX 0.69% 405.4586 Delayed Quote.48.97%
UBS GROUP AG 0.55% 14.72 Delayed Quote.18.04%
WTI 0.93% 73.961 Delayed Quote.49.32%
Latest news "Economy & Forex"
05:48aChina welcomes Huawei executive home, but silent on freed Canadians
RE
05:00aHaitian migrants on the move weigh jobs in Mexico after clearout
RE
04:55aZimbabwe bolsters emissions targets ahead of climate summit
RE
04:41aPalm prices to stay firm from Oct to Feb, could ease from March - analyst Mistry
RE
04:16aGroup behind Hong Kong's annual Tiananmen vigil disbands amid probe
RE
04:15aS&P pushes Ethiopia's ratings into junk territory on delayed debt restructuring
RE
04:04aMoody's upgrades Hungary's rating on strong rebound in boon for Orban
RE
04:03aChinese coal firms meet to address winter supply challenges
RE
03:31aBritain expected to ease visa rules as truck driver shortage bites
RE
03:16aQuad nations to focus on clean-energy supply chain, says Australia PM
RE
Latest news "Economy & Forex"