Oil prices rose for a fourth consecutive session on Wednesday, gaining more than $1 in early trading as renewed attacks across the Middle East heightened concerns about possible disruptions to global crude supplies.
Brent crude futures climbed 1.4% to $99.33 a barrel by 0212 GMT, while U.S. West Texas Intermediate crude rose 1.4% to $94.34 a barrel.
Brent prices have surged by about a quarter since early August as hopes for a permanent resolution to the six-month-old conflict have faded and renewed fighting has intensified. The benchmark is now approaching the key $100-a-barrel threshold.
QTensions escalated further on Tuesday after Iranian-backed Houthi forces in Yemen launched attacks on several Saudi cities, drawing another U.S. ally deeper into the conflict.
U.S. forces also struck multiple Iranian oil tankers, while Iran targeted a U.S. base in Jordan, adding to concerns about the potential impact of the widening conflict on energy supplies.
“Recent developments only reinforce the view that we are still some way from a restart in peace talks,” ING analysts said in a note. “In the meantime, the market is likely to continue to price in a sizeable risk premium.
”The latest attacks have raised fears of deeper disruptions to Middle East oil supplies, which are already under pressure following strikes on regional energy infrastructure and key shipping routes.
Saudi Arabia has diverted some of its oil exports away from the Strait of Hormuz, but analysts warned that sustained attacks on the kingdom could make it more difficult to maintain crude flows to international markets.
“Iran’s attacks on Saudi energy facilities and the subsequent destruction of five Iranian tankers raised concerns about another prolonged disruption to oil supplies,” OCBC analysts said in a note.
By:Rachael Djabakie