Crude prices jumped more than 1% after Yemeni separatists carried out a drone attack on a Saudi Arabian oil facility during the weekend.
Brent crude climbed 78 cents to $59.42 a barrel, while US crude gained 64 cents to trade at $55.51 per barrel, reported Reuters.
According to media reports, Yemen’s Houthi group attacked an oilfield in eastern Saudi Arabia setting a gas plant on fire.
The incident further fuelled ongoing tensions in the Middle-East. However, state-owned oil firm Saudi Aramco noted that oil production was not affected by the drone strikes.
OANDA senior market analyst Edward Moya was quoted by Reuters as saying: “Oil is benefiting from an overall optimism that we won’t see the doomsday trade war scenario and after a drone attack on oil and gas facilities in Saudi Arabia reminded markets geopolitical tensions in the Middle East are going nowhere anytime soon.”
However, the increase in crude prices was restricted by China-US trade tensions.
White House economic adviser Larry Kudlow said officials of the two countries will speak within ten days in order to break the impasse.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) revised its global oil demand growth forecast for this year by 40,000 barrels per day (bpd) to 1.10 million bpd.
It also added that the crude market will remain slightly oversupplied next year.