Oil prices jumped again on increasingly bleak prospects for peace in the Middle East following an attack on a nuclear power plant in the United Arab Emirates. Brent crude futures rose 86 cents, or 0.79%, to $110.12 a barrel, after hitting $112, their highest since May 5.
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U.S. West Texas Intermediate crude rose 89 cents, or 0.84%, to $106.31, after hitting its highest since April 30 at $108.70. The June contract expires on Tuesday.
Last week, prices for both contracts rose by more than 7% as hopes of a peace deal to end attacks on ships and their seizures in the Strait of Hormuz trade route faded.
“One billion barrels of oil are trapped across the strait, and Friday’s price surge, which sent WTI up $10 in a week, was supported by bellicose rhetoric from the US and Iran, as well as continued attacks on oil facilities in the region and merchant ships,” said PVM analyst Tamás Varga .
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Talks last week between US President Donald Trump and Chinese leader Xi Jinping ended without any hint from the world's largest oil importer that it would help resolve the conflict sparked by US-Israeli attacks on Iran.
Drone attacks on the UAE and Saudi Arabia, as well as rhetoric from the United States and Iran, have raised concerns about an escalation of the conflict.
Saudi Arabia, which intercepted three drones that entered Iraqi airspace, warned it would take the necessary operational measures to respond to any attempt to violate its sovereignty and security. Meanwhile, Emirati officials said they were investigating the source of the strike on the Baraka nuclear power plant, adding that the UAE had the right to respond to what it called “terrorist attacks,” Reuters reports.
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Trump is expected to meet with national security advisers to discuss military options, Axios reported, citing U.S. officials. The Trump administration recently authorized the rescission of a sanctions waiver that had previously allowed countries, including India, to buy Russian oil transported by sea, after the waiver was extended for a month.
Previously, “FACTS” reported that the US had suspended permission to purchase Russian oil.
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