Oil prices have increased by nearly 1% triggered by growing tensions in the Middle East where Saudi Arabia and other Arab states decided to terminate bilateral ties with Qatar.

Brent crude oil futures CLc1 increased by 48 cents to reach $50.43 per barrel, while the US West Texas Intermediate futures CLc1 also rose 48 cents to $48.14 a barrel, reported Reuters.

Saudi Arabia along with the United Arab Emirates, Egypt and Bahrain has severed ties with Qatar, accused it of supporting extremism that disturbs regional stability.

"Qatar has a production capacity of about 600,000bpd."

Qatar has a production capacity of about 600,000bpd.

Global benchmark Brent also received support from Saudi Aramco, which increased the July official selling prices for its Arab Light grade to Asia, north-west Europe and the US.

A Thomson Reuters Oil Research report noted that OPEC supplies between February and April this year decreased but shipments from the oil cartel increased more than one million bpd to 25.18 million bpd in May compared with April.

The rig count in the US increased by 11 in the week ending 2 June to 733, resulting in a rise in production.


Image: OPEC supplies between February and April this year decreased. Photo: courtesy of Vee TEC via Freeimages.com.