Brent surpasses $100/bbl mark as Middle East tensions escalate

The front-month ICE Brent contract has gained by $1.12/bbl on the day, to trade at $100.36/bbl at 09.00 GMT.

IMAGE: Crude oil pumpjacks. Getty Images

Upward pressure:

Brent crude’s price has continued to climb, surpassing the $100/bbl mark, as tensions in the Persian Gulf escalate.

The US Central Command (CENTCOM) carried out additional strikes on Iran-linked oil tankers yesterday, hitting five vessels in response to Tehran targeting a US Navy warship.

“The oil market continues to move higher this morning as the Middle East tension escalates,” two analysts from ING Bank noted.

One vessel, M/T Riesco, sank in the Gulf of Oman, CENTCOM noted.

“Recent developments only reinforce the view that we’re still some way from a restart in talks,” ING Bank’s analysts added.

Downward pressure:

While Brent’s price is under limited downward pressures today, market participants are eyeing US crude inventory data that is scheduled for release later this week.

A build in US crude stocks typically indicates lower demand for oil and can put some downward pressure on Brent's price.

The crude stocks report has been delayed this week due to the US Labour Day holiday.

By Aparupa Mazumder

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