Brent crude tops $70 per barrel on Iran attack concerns
LONDON, Jan 29 (Reuters) – Brent oil futures prices jumped on Thursday, hitting a four-month high on rising concerns of the potential impact a possible U.S. military attack on Iran, OPEC’s fourth-largest producer, with output of 3.2 million barrels per day.
“The immediate (market) concern … is the collateral damage done if Iran takes a swing at its neighbours or possibly even more tellingly, it closes the Strait of Hormuz to the 20 million barrels per day of oil that navigates it,” said PVM analyst John Evans.
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Brent crude futures rose $1.39, or 2.03%, to $69.79 a barrel by 1011 GMT. At its intra-day peak, Brent traded as high as $70.35 a barrel, its highest since late-September.
U.S. West Texas Intermediate crude was up $1.37, or 2.17%, to $64.58 a barrel at 1011 GMT. WTI futures topped $65 a barrel on Thursday, also reaching a four-month high.
Some analysts are forecasting higher prices because of the Iranian concerns.
“The potential for Iran getting hit has escalated the geopolitical premium of oil prices by potentially $3 to $4 (per barrel),” analysts at Citi said in a note on Wednesday.
They added that further geopolitical escalation could push prices to as high as $72 a barrel for Brent over the next three months.
“The main driver of oil prices remains geopolitical risk premium surrounding Iran and the Middle East, though unplanned outages in Kazakhstan and U.S. (Winter Storm Fern) have had temporary impact as well,” DBS Bank’s energy sector team lead Suvro Sarkar said in an email.
Reporting by Robert Harvey in London, Sam Li and Trixie Yap in Singapore; Editing by Christian Schmollinger, Jamie Freed and Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.
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