TOKYO: Oil prices extended gains
to hit their highest level in nearly two weeks on Monday, buoyed as Asian
shares joined a global recovery in equity markets and as worries grew over
tensions in the Middle East.
Prime Minister Benjamin Netanyahu
said on Sunday that Israel could act against Iran itself, not just its allies
in the Middle East, after border incidents in Syria brought the Middle East
foes closer to direct confrontation.
US West Texas Intermediate crude
for March delivery was up 73 cents, or 1.2 per cent, at $62.41 a barrel by 0600
GMT, after earlier touching its highest since Feb. 7.
London Brent crude was up 52
cents, or 0.8 per cent, at $65.36, after rising more than 3 per cent last week.
"The upside momentum since
WTI hit last week's low of $58 has been continuing," said Tetsu Emori, CEO
of Emori Capital Management in Tokyo.
"Oil got mild support from
gains in Asian equity markets, but has been getting pressure from the rise in
US rig count and a slight recovery in the dollar."
Trading is expected to be slower
than usual due market holidays in the United States as well as Greater China.
The US oil rig count, an
indicator of future production, rose by seven to 798, its highest since April
2015, according to a weekly report from General Electric's Baker Hughes unit.
That marked the first time since
June that drillers added rigs for four consecutive weeks, and the figure was
well up on the 597 rigs that were active a year earlier as energy companies
have boosted spending since mid-2016 when crude prices began recovering from a
two-year crash.
Surging US production is
offsetting efforts by the Organization of the Petroleum Exporting Countries
(OPEC) and some other producers including Russia to curb production by 1.8
million barrels per day (bpd) until the end of 2018.
Money managers slashed their
bullish wagers on ICE Brent crude oil futures by the most in nearly eight
months in the week to Feb. 13, data showed, as prices plunged amid concerns of
oversupply.
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Source: Economictimes
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