Oil jumped 3% on Tuesday to its highest level this month, as further attacks on ships in the Red Sea prompted fears of shipping disruptions and on hopes of interest rate cuts that could boost economic growth and fuel demand.
Brent crude futures were up US$2.32, or 2.93%, at US$81.40 a barrel by 1815 GMT. US West Texas Intermediate crude rose by US$2.26, or 3.1%, to US$75.81.
The rally, in thin trade with some markets closed for holidays, added to last week’s gains of about 3% after Houthi attacks on ships worried investors and as the violence in Gaza showed no sign of easing.
“There’s plenty of geopolitical tensions today in terms of the Middle East … and it has given some angst here to the security of the transit of oil and other goods,” said John Kilduff, partner with Again Capital LLC.
Explosions in the Red Sea off the coast of Yemen were reported on Tuesday after sightings of unmanned aircraft and missiles in two separate incidents, a British maritime authority said.
Yemen’s Houthi military spokesman Yahya Sarea said on Tuesday the group launched an attack with missiles on a MSC United commercial ship in the Red Sea after it rejected three warning calls.
An Israeli minister on Tuesday hinted that the country had retaliated in Iraq, Yemen and Iran for attacks carried out against it as the war with Hamas-led militants in the Gaza Strip widens to other areas of the region and the Palestinian death toll continues to climb.
