Oil prices extended gains on Monday after climbing more than 2 per cent in the previous session, as tensions between the US and Iran kept investors on edge even after Kazakhstan’s main export pipeline resumed full operations.
Brent crude futures rose 12 cents, or 0.18 per cent, to $66 a barrel at 0127 GMT. US West Texas Intermediate crude was at $61.21 a barrel, up 14 cents, or 0.23 per cent.
Both benchmarks notched weekly gains of 2.7 per cent to close on Friday at their highest points since January 14. A US military aircraft carrier strike group and other assets are expected to arrive in the Middle East in the coming days.
On Thursday, US President Donald Trump said the US had an “armada” heading toward Iran but hoped he would not have to use it, as he told Tehran not to kill protesters or restart its nuclear program.
On Friday, a senior Iranian official said Iran would treat any attack “as an all-out war against us.”
“President Trump’s declaration of a US armada sailing toward Iran has reignited supply disruption fears, adding a risk premium to crude prices and supported risk aversion flows more broadly this morning,” IG market analyst Tony Sycamore said.
Kazakhstan’s Caspian Pipeline Consortium said it returned to full loading capacity at its terminal on the Black Sea coast on Sunday after completing maintenance at one of its three mooring points.
In the US, crude and natural gas production fell and spot power prices spiked as a winter storm started to sweep across the country on Friday.
“Oil production has also been affected by severe winter weather, with losses of around 250,000 bpd (barrels per day), including declines in the Bakken, Oklahoma, and parts of Texas,” JPMorgan analysts said in a note.
