Oil rises with news of attack
Oil prices rose more than 3 percent following unconfirmed reports of explosions near the Iranian city of Isfahan.
Oil prices jumped after US officials said Israel had hit targets in Iran and Brent rebounded on concerns about the potential for a broader regional conflict that could jeopardize crude supplies.
While the global benchmark Brent was traded at $89.99 per barrel with an increase of 3.3 percent, US crude oil increased by 3.5 percent to $85.62 per barrel.
Prices in benchmark contracts eased slightly after rising more than $3 per barrel.
Explosions were heard near Isfahan airport, the country’s semi-official Fars news agency reported, but stressed that the cause was unknown. According to two US officials, Israel launched a missile attack on Iran.
Investors are preparing for Israel’s response to Iran’s missile and drone attack last weekend, and rhetoric between the two escalates as Tehran warns against attacking its nuclear facilities. The Middle East accounts for approximately one-third of global crude oil supply.
As tensions increased, safe haven assets also rose. Gold rose to a record high while the US dollar climbed to a multi-month high. Stocks fell while copper gained value.
“The market will probably have to start pricing in an even larger risk premium,” said Warren Patterson, head of commodity strategy at ING Groep NV in Singapore.