Oil prices extended gains, with Brent headed for a record monthly rise, after Yemeni Houthis launched their first attacks on Israel over the weekend, widening the US-Israel war with Iran in the Middle East.
Brent crude futures jumped $2.43, or 2.16 per cent, to $115 a barrel by 0342 GMT after settling 4.2pc higher on Friday.
US West Texas Intermediate was at $101.50 a barrel, up $1.86, or 1.87pc, following a 5.5pc gain in the previous session.
“The market has all but discounted the prospect of a negotiated end to the war, Trumps claims of ongoing ‘direct and indirect’ talks with Iran notwithstanding, and is bracing for a sharp escalation in military hostilities, which is a bullish signal for crude, with huge uncertainties on the timing and nature of the outcome,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“The conflict is no longer concentrated in the Persian Gulf and around the Strait of Hormuz, but now extends into the Red Sea and the Bab el-Mandeb, one of the world’s most crucial chokepoints for crude and refined product flows,” JP Morgan analysts led by Natasha Kaneva said in a note.
