Crude oil prices rose Friday after Iranian state media said two rockets had struck an Iranian tanker traveling through the Red Sea.
Brent crude futures were up 2.4%, to $60.51 a barrel, with West Texas Intgermediate futures settling 2.2% higher, at $54.70/Bbl, Kallanish Energy reports.
The National Iranian Oil Co. told media the tanker was hit by two explosions at 5:00 a.m. and 5:20 a.m. local time. It said the tanker had been traveling through the Red Sea off the coast of Saudi Arabia, 60 miles from the city of Jeddah.
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Commenting on the oil price move, Cailin Birch, the global economist at The Economist Intelligence Unit, said in a research note a 2% move higher is still fairly moderate, adding that two factors are probably helping to avoid a sharper price increase, CNBC reported.
“Economic data in both the U.S. and the EU slowed noticeably in September, confirming that global growth is on a downward trend,” Birch said. “It remains unlikely that limited strikes and/or legal contests will spill over into direct military confrontation in the Middle East. No party has anything to gain from such a conflict.”
The incident comes amid heightened tensions in the region. Predawn attacks in Saudi Arabia on Sept. 14 hit two of its largest production facilities, forcing the country to temporarily shut down roughly 50% of its output, or more than 5% of the world’s daily crude production.
The following Monday, international benchmark Brent crude rose as much as 19.5% to $71.95 per barrel at the open — the biggest jump on record — before paring gains.
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