(Bloomberg) Oil rose to the highest level in more than three weeks as political tensions between the U.S. and Iran continued to simmer, with President Donald Trump announcing plans for further sanctions against the OPEC member.Futures added as much as 1.4% in New York after surging 9.4% last week. Trump tweeted about the sanctions days after abruptly calling off planned air strikes against the Islamic Republic in retaliation for the shooting down of a U.S. Navy drone. Iran’s navy warned the downing of unmanned aircraft could be repeated if intrusions into its airspace continue, according to state news agency Tasnim.
“The events of last week mean that there is much for oil bulls to hang their hats on,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London.
Oil has rallied after falling to the lowest level in almost five months in mid-June as escalating tensions between Washington and Tehran threaten to disrupt crude flows. Hopes that China and the U.S. will restart trade negotiations have also aided prices, with Trump set to meet with Chinese President Xi Jinping at the G-20 summit in Japan this week.
West Texas Intermediate for August delivery rose as much as 79 cents, or 1.4%, to $58.22 a barrel on the New York Mercantile Exchange, the highest since May 30. It traded for $57.82 as of 10:37 a.m. London time. Prices settled up 0.6% on Friday, capping a weekly rally that was the biggest since Dec. 2, 2016.
Brent for August settlement edged up 4 cents to $65.24 a barrel on London’s ICE Futures Europe Exchange, after closing up 1.2% on Friday. The benchmark crude contract traded at a premium of $7.41 to WTI.
Other oil-market news
Oil-tanker owners are raising the prices they charge to export Middle East crude as tensions surge in a region that accounts for about a third of all seaborne petroleum shipments.
A fire at the Philadelphia Energy Solutions refinery, the largest on the U.S. East Coast, sent gasoline prices soaring, threatening to raise pump prices from Delaware to Maine just as American drivers get set to head off on vacation.
Kazakhstan and Azerbaijan, two of OPEC’s biggest allies, said they support an extension of oil-production cuts due to expire this month.
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