Oil prices rose on Monday to their highest in about 13 months as fears of heightened tensions in the Middle East prompted fresh buying.
According to Reuters, hopes that a United States (US) stimulus and an easing of lockdowns will raise fuel demand also provided support.
Brent crude was up $1.02, or 1.6%, at $63.45 a barrel at 9:06am, after climbing to a session high of $63.76, the highest since January 22, 2020.
U.S. West Texas Intermediate (WTI) crude futures gained $1.28, or 2.2%, to $60.75 a barrel. It touched $60.95, its highest since January 8 last year, earlier in the session.
Oil prices gained around 5% last week.
Saudi Arabia’s state TV reported that the Saudi-led coalition fighting in Yemen said late on Sunday it intercepted and destroyed an explosive-laden drone fired by the Iran-aligned Houthi group toward the kingdom, raising fears of fresh Middle East tensions.
Chief analyst at commodities broker Fujitomi Co., Kazuhiko Saito, said the news triggered the spike in oil prices.
“An early spike in oil markets was triggered by the news,” he said.
“But the rally was also driven by growing hopes that a U.S. stimulus and easing of lockdowns will boost the economy and fuel demand.”
He added that WTI may be pulled back by profit-taking as it reached a key $60 level.
Oil prices have rallied over recent weeks also as supplies tighten, due largely to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the group OPEC+.