19 November 2012 09:30 [Source: ICIS news]
SINGAPORE (ICIS)--Crude futures strengthened on Monday, with prices rising by more than $1/bbl at one stage, amid supply concerns generated by Middle East tensions after further Israeli air strikes on Gaza.
At 09:08 GMT, January Brent crude on London’s ICE futures exchange was trading at $109.76/bbl, up by 81 cents/bbl from the previous close. Earlier, the North Sea benchmark rose to a session high of $109.95/bbl, up by $1.00/bbl.
January NYMEX light sweet crude futures (WTI) were trading at $87.87/bbl, up by 95 cents/bbl from the previous close. Earlier, the US benchmark rose to a session high of $87.99/bbl, up by $1.07/bbl.
Middle East violence escalated over the weekend, with Israeli missile attacks on Gaza and Palestinian rocket strikes on Israel. Israel has mobilised up to 75,000 army reservists.
Egyptian President Mohamad Mursi has warned Israel against a ground invasion against Gaza. The Arab League also met in an emergency session in Cairo on Sunday to discuss the crisis and is sending a delegation of foreign ministers to Gaza on Tuesday.
There are concerns that if the conflict continues to worsen, other nations in the region may be drawn into it, and could threaten crude supplies from the Middle East, which accounts for around one third of global crude and natural gas liquids production, and nearly half of global crude exports.
Meanwhile, there was optimism that the US may avoid the “fiscal cliff” following talks on 16 November between the US President, Barack Obama and Congressional leaders.
The Republican majority leader of the House of Representatives, John Boehner said that his party was willing to discuss increased taxes as long as they were accompanied by spending cuts.
There are concerns that if the “fiscal cliff” measures are implemented, the US and the global economy could face another recession.
($1 = €0.78)
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