Oil prices rose yesterday amid high tensions in the Middle East after a British tanker was seized by the Iranian military at the end of last week.
Brent crude futures were up 51 cents, or 0.8 per cent at $62.98 a barrel. The international benchmark rose to as high as $63.47 earlier, while the West Texas Intermediate (WTI) crude futures were up 15 cents, or 0.3 per cent at $55.78.
WTI fell over 7 per cent and Brent fell more than 6 per cent last week.
“Falling global demand and rising U.S. stockpiles have helped turn oil charts very bearish, but that may not last as tensions remain high in the Persian Gulf,” Edward Moya, senior market analyst at OANDA in New York, said in a note.
Iran’s Revolutionary Guards said they had captured a British-flagged oil tanker in the Gulf after Britain seized an Iranian vessel earlier this month, ratcheting up tensions along a vital international oil shipping route.
Britain was weighing its next moves on Sunday, with few good options apparent as a recording emerged showing that the Iranian military defied a British warship when it boarded and seized the ship three days ago.
Prime minister, Theresa May’s office said she would chair a meeting of Britain’s emergency response committee yesterday morning to discuss the crisis. A senior United States administration official said on Friday the U.S. would destroy any Iranian drones that fly too close to its ships.
A day earlier, the U.S. said one of its navy ships had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.
The International Energy Agency, IEA, does not expect oil prices to rise significantly because demand is slowing and there is a glut in global crude markets, the Executive Director Fatih Birol said on Friday in public comments.