Oil prices climbed on Monday, with the benchmarks for crude touching their highest levels in at least 7 months in the wake of Friday’s killing of Iranian Gen. Qassem Soleimani in a U.S. drone strike, which has ratcheted up Middle East tensions.
“Traders are driving in risk premium back into [oil] prices as Iran swears revenge and many assume that based on their past attacks, it will somehow involve oil infrastructure,” said Phil Flynn, senior market analyst at Price Futures Group, in a daily note. The big question, however, will be whether Iran carries out any attacks, as “lashing out may actually hurt the regime.”
West Texas Intermediate crude for February delivery CLG20, +0.63% was last up 46 cents, or 0.7%, at $63.51 a barrel on the New York Mercantile Exchange, poised for the highest settlement since May 1, according to FactSet data.
March Brent crude BRNH20, +0.98% added 70 cents, or 1%, at $69.30 a barrel on ICE Futures Europe, after briefly touching a high at $70.74. The front-month contract is looking at its highest finish since about May 29.
President Donald Trump on Sunday threatened potentially “disproportionate” attacks if Iran strikes back against U.S. targets. On Sunday night, Trump threatened harsh sanctions against Iraq if it expels U.S. troops, and doubled down on earlier comments threatening to target Iranian cultural sites if Iran were to strike back against the U.S.
Shares of Aramco, Saudi Arabia’s national oil company, tumbled 1.7% Sunday to their lowest levels since the company’s massive initial public offering late last year.
In a research brief, Edward Moya, senior market analyst at Oanda, said further conflict in the Middle East could possibly lead to “some disruption in the Strait of Hormuz, which in 2018 handled 21 million barrels of crude a day, well over 20% of the world’s oil transits.”
February natural gas NGG20, +0.42% tacked on 0.8% to trade at $2.147 per million British thermal units.
Mike Murphy contributed to this article
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