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BP
has temporarily paused all transits through the Red Sea, it said
on Monday, following attacks over the weekend by Houthi forces
which control most of Yemen. Other shipping firms said over the
weekend that they would avoid the Suez Canal.
Brent crude futures were up 62 cents, or 0.8%, to $77.17 a
barrel by 1150 GMT, while U.S. West Texas Intermediate crude
rose 47 cents, or 0.7%, to $71.90.
Both crude benchmarks posted small gains last week, following
seven weeks of decline, after a U.S. Federal Reserve meeting
last week raised hopes that interest rate hikes are over and
cuts are on their way.
"The rise in geopolitical risk premium, which has come in the
form of regular hostilities towards commercial vessels in the
Red Sea by Iran-backed Houthi rebels plays its indisputable part
in oil's resurrection," said Tamas Varga of oil broker PVM. said
Tamas Varga of oil broker PVM.
Also adding support, Russia said on Sunday it would deepen oil
export cuts in December by potentially 50,000 barrels per day or
more, earlier than promised, as the world's biggest exporters
try to support global oil prices.
This comes after Moscow suspended about two-thirds of loadings
of its main export grade Urals crude from ports due to a storm
and scheduled maintenance on Friday.
Still, PVM's Varga was sceptical of the extent to which Russia
will make voluntary output cuts.
"In reality it is just re-packaging weather-related halts in
exports," he said.
(Reporting by Alex Lawler, Florence Tan and Emily Chow; editing
by Jason Neely)
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