Oil extends gains on rising Mideast tensions

[SINGAPORE] Oil prices added to recent gains on Monday, with Brent nearly at US$70 a barrel as escalating tensions in the Middle East fanned worries about disruptions to supplies.

Brent crude futures rose to a high of US$69.95 a barrel and were at US$69.65 a barrel at 0016 GMT, up US$1.05 or 1.5 per cent from Friday's settlement.

US West Texas Intermediate crude was at US$63.86 a barrel, up 81 US cents or 1.3 per cent, after touching an intraday high of US$64.27.

Oil prices jumped more than 3 per cent on Friday after the United States killed a top Iranian commander in an air strike on Baghdad airport.

The Iraqi government on Sunday called on American and other foreign troops to leave Iraq, heightening concerns of a widening Middle East conflict that may disrupt oil supplies from the region.

US President Donald Trump on Sunday threatened "major retaliation" against Iran if Tehran were to retaliate for the killing.

"The assassination of Iranian General Qassem Soleimani will trigger a long cycle of regional escalation with significant risks to US assets and Mideast energy infrastructure that nevertheless stop short of war," Eurasia Group analyst Ayham Kamel said in a note.

"But the risk of limited conflict is real. It would include substantial Iranian attacks on Gulf energy targets and direct naval clashes between the US and Iran."

The Middle East accounts for nearly half of the world's oil production, while Iraq is the second largest producer among the Organization of the Petroleum Exporting Countries (OPEC).

REUTERS