Brent gains as Middle East supply concerns multiply
The front-month ICE Brent contract has surged by $3.89/bbl on the day from Friday, to trade at $107.98/bbl at 09.00 GMT.
IMAGE: Oil storage facility. Getty Images
Upward pressure:
Brent crude’s price has shot up this week, amid supply disruption concerns and repeated vessel attacks near the Strait of Hormuz.
Another commercial vessel, carrying 14 Indian seafarers, came under a missile attack off the coast of Oman yesterday, leaving one crewmember missing, India’s Ministry of External Affairs reported.
In another news, Saudi Arabia has temporarily ceased flows via its 1,200 km East-West Pipeline, after Yemen’s Iran-aligned Houthi militants targeted it last week. The news has put further upward pressure on Brent’s price.
“Following last week's developments, it’s not surprising that oil prices are trading higher,” 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 increased by one over the week to 450 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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