Oil prices have reached seven-month highs, as traders reacted to heightened tensions between the US and Iran ahead of nuclear talks this week, Reuters reported.
US crude futures rose to $67.28 a barrel on Monday, while Brent crude touched its highest level since 31 July at $72.50 a barrel. Prices fell back late in the session, but were up again on Tuesday morning, approaching Monday’s highs.
James Hosie, a research analyst at Shore Capital, said oil markets were “rationally trying to price in a risk premium for oil prices, given the disruption a conflict could have on global supplies”.
“The risk of possible military escalation in the Middle East is gaining traction, and thus, traders appear to hedge against worst-case scenarios,” said Priyanka Sachdeva, a senior market analyst at Phillip Nova. She added that the current prices were “largely driven by anticipation rather than actual supply loss”.
Washington and Tehran are set to hold a third round of nuclear talks in Geneva this Thursday, as confirmed by Oman’s foreign minister on Sunday.
MNA
