US-Iran tensions, Opec's indication of continuing cuts lead to oil surge

International News

Oil rose to multi-week highs on Monday after Organization of the Petroleum Exporting Countries (Opec) indicated it will likely maintain production cuts that have helped support prices this year, while tensions continued to escalate in the Middle East.

Brent crude was up by 96 cents, or 1.3%, at $73.17 a barrel by 0227 GMT, having earlier touched $73.40, the highest since April 26.

U.S. West Texas Intermediate crude was 82 cents, 1.3%, higher at $63.58 a barrel. The US benchmark reached $63.81 earlier, the highest since May 1.

Saudi Energy Minister Khalid al-Falih said on Sunday there was consensus among the Opec and allied oil producers to drive down crude inventories "gently" but he would remain responsive to the needs of a "fragile market".

United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei earlier told reporters that producers were capable of filling any market gap and that relaxing supply cuts was not "the right decision".
Meanwhile, US President Donald Trump threatened Tehran on Sunday, tweeting that a conflict would be the "official end" of Iran, while Saudi Arabia said it was ready to respond with "all strength" and that it was up to Iran to avoid war.

The rhetoric follows last week's attacks on Saudi oil assets and the firing of a rocket on Sunday into Baghdad's heavily fortified "Green Zone" that exploded near the US embassy.

 "Al-Falih and the UAE both put paid to suggestions of increasing production over the weekend and then President Trump essentially telling Iran to bring it on, was a perfect short-term storm for oil prices," Greg McKenna, strategist at McKenna Macro, told Reuters by email.