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| FILE PHOTO: A Royal Gibraltar Police’s boat guards the Iranian oil tanker Grace 1 as it sits anchored after it was seized earlier this month by British Royal Marines off the coast of the British Mediterranean territory on suspicion of violating sanctions against Syria, in the Strait of Gibraltar, southern Spain July 20, 2019. REUTERS/Jon Nazca/File Photo |
Oil prices rose more than 1% on Monday, as investors worried about possible supply disruptions in the energy-rich Middle East after Iranโs seizure of a British tanker last week.
Brent crude futures climbed $1 a barrel, or 1.6% to 63.47 a barrel by 12:28 p.m. EDT (1728 GMT).
West Texas Intermediate (WTI) crude futures were up 56 cents, or 1%, at $56.19 a barrel.
Capping gains, force majeure was lifted on loadings of crude at Libyaโs Sharara oilfield, the countryโs largest, whose closure since Friday had caused an output loss of about 290,000 barrels per day (bpd).
Last week, WTI fell over 7% and Brent lost more than 6%, weighed down by economic worries and the return of U.S. production in the Gulf of Mexico after a hurricane.
โSome of the selling pressure from demand concerns seems to have evaporated this week,โ said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. โThe fears about geopolitics seem to have halted some of that selling pressure,โ he said.
Iranโs Revolutionary Guards said on Friday they had captured a British-flagged oil tanker in the Gulf in response to Britainโs seizure of an Iranian tanker earlier this month.
The move stoked fears of potential supply disruptions in the Strait of Hormuz at the mouth of the Gulf, through which flows about one-fifth of the worldโs oil supplies, but no major escalation with Britain or the United States appears imminent.
โIn the cat and mouse game that Iran is playing with the U.S., it is taking calculated risks,โ Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum.
โSo far the U.S. is not taking the bait.โ
Last week, data showed shipments of crude from Saudi Arabia, the worldโs top oil exporter, fell to a 1-1/2-year low in May.
Speculative money is flowing back into oil in response to the escalating dispute between Iran, the United States and other Western nations, along with signs of falling supply. In early May, new, tighter U.S. sanctions on Iran took effect.
Hedge funds and other money managers raised their combined futures and options positions on U.S. crude for a second week and increased their positions in Brent crude as well, according to data from the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange.
Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd, citing disappointing global economic activity.
REUTERS
