Markets News

Middle East tensions triggering hike in oil prices

As fears of heightened tensions in the Middle East prompted fresh buying, oil prices soared on Monday to their highest within a span of 13 months.

Reportedly, oil prices gained around 5% last week.

After climbing to a session high of $63.76, Brent crude was on a rising trend with increment up to $1.02, or 1.6%, at $63.45 a barrel at 0806 GMT.

So far, this has been the highest recorded price since Jan 22, 2020.

On Sunday, the Saudi-led coalition fighting in Yemen seized and demolished an explosive-laden drone fired by the Iran-aligned Houthi group toward the kingdom.

The hiking of oil prices over recent weeks as a result of tightening of supplies, due largely to production cuts from the Organization of the Petroleum Exporting Countries.

To top it all, investors’ risk appetite was augmented by robust global stock markets.

Evidently, as successful coronavirus vaccine rollouts globally raise hopes of a rapid economic recovery, Asian shares advanced to record new highs on Monday.

U.S. West Texas Intermediate (WTI) crude futures attained an increment of $1.28, or 2.2%, to $60.75 a barrel.

Further, it reached an estimate of $60.95 – its highest since Jan 8 last year, earlier in the session.

However, the rally was primarily driven by rising hopes that a U.S. stimulus and easing of lockdowns will boost the economy and fuel demand respectively.

Moving forward, WTI may be pulled back by profit-taking as it has successfully touched a key level of $60 till now.

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