Oil prices ease, but Middle East tanker attacks support

Oil prices ease, but Middle East tanker attacks support

Oil prices are up more than one percent Friday, having been hammered the day before on concerns
FILE PHOTO: An oil rig. (Photo: AFP)

TOKYO: Oil fell on Friday (Jun 14) after sharp gains in the previous session when prices were boosted after attacks on two oil tankers in the Gulf of Oman stoked concerns of reduced crude flows through one of the world's key shipping routes.

The attacks near Iran and the Strait of Hormuz countered concerns about global demand that had hammered prices in recent weeks, analysts said.

It was the second time in a month tankers have been attacked in the world's most important zone for oil supplies, amid rising tensions between the United States and Iran. Washington quickly blamed Iran for Thursday's attacks, but Tehran bluntly denied the allegation.

READ: Piracy, collisions, missiles: Tankers in troubled waters

READ: Iran 'responsible' for Gulf of Oman attacks: Pompeo

Brent crude futures were down 17 cents, or 0.3 per cent, at US$61.14 a barrel by 0041 GMT. They settled up 2.23 per cent on Thursday, at US$61.31, having risen as much as 4.5 per cent.

US West Texas Intermediate crude futures were down 39 cents, or 0.8 per cent, at US$51.89 a barrel. They closed 2.23 per cent higher at US$52.28 a barrel in the previous session, having also risen as much as 4.5 per cent.

"The drums of war are beating and driving asset prices," Greg McKenna, strategist at McKenna Macro said in a morning note.

Tensions in the Middle East have escalated since US President Donald Trump withdrew from a 2015 multinational nuclear pact with Iran and reimposed sanctions, especially targeting Tehran's oil exports.

Iran, which has distanced itself from the previous attacks, has said it would not be cowed by what it called psychological warfare.

READ: Strait of Hormuz: The world's most important oil artery

READ: US releases video it says shows Iran's military recovering mine

US Secretary of State Mike Pompeo said the United States has assessed Iran was behind the attacks on Thursday, and arrived at its conclusion based on intelligence, weapons used and the level of expertise needed.

Iran "categorically rejects the US unfounded claim with regard to Jun 13 oil tanker incidents and condemns it in the strongest possible terms," the Iranian mission to the United Nations said in a statement on Thursday evening. 

Source: Reuters/ic

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