Economy

Oil prices rise as geopolitical tension escalates

Oil prices rise as geopolitical tension escalates”

Analysts said unrest in the Middle East and possible USA action on the Iran nuclear deal boosted the oil prices, as traders feared geopolitical tensions could cut off oil exports from the region.

Brent crude futures, the worldwide benchmark for oil prices, were at 57.85 dollars.

USA crude prices were also supported by drillers cutting back the number of rigs looking for new production.

On Friday, US President Donald Trump ignored the advice of anxious allies and decertified Iran's compliance with the 2015 agreement despite global inspectors say it is.

The Republican-controlled Congress will now have to decide whether to reimpose sanctions on Iran.

The light crude settled down $1.69 at $55.31 per barrel in the week and Iran Heavy, one of the country's main export grades, fell $1.26, or 2.3% to $53.27 per barrel in the week, IRNA reported on Saturday, citing a report by the Oil Ministry. While analysts said they did not expect renewed sanctions to have such a big impact again, especially as the United States would likely act alone, they did warn that such a move would be disruptive.

On the data front, the number of rigs operating in US oil fields fell by 5 to a total of 743 rigs last week, oilfield service firm Baker Hughes said in its weekly report on Friday.

U.S. West Texas Intermediate (WTI) crude futures were at $51.89 per barrel, up 44 cents, or 0.9 percent.

Iraqi forces began advancing towards the key oil fields of Kirkuk now held by Kurdish forces, a development that can disrupt oil supplies to the market.

An oil rig situated at Louisiana's Lake Pontchartrain was also reported to have exploded injuring six people.

Energy services firm Baker Hughes said that in the week to 13 October, drillers cut five oil rigs to bring the total down to 743, the lowest since early June.



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