Oil prices rise on risk of broader Middle East conflict

REUTERS: Oil prices extended gains yesterday after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and concern over its impact on oil.

Global benchmark Brent crude futures rose 71 cents, or 0.9 percent, to US$ 81.55 a barrel by 1124 GMT. U.S. West Texas Intermediate crude gained 72 cents, also 0.9 percent, to US$ 78.63.

The most active contracts on both benchmarks jumped about 4 percent in the previous session.

Hamas leader Ismail Haniyeh was killed in the Iranian capital Tehran on Wednesday. With Israel›s killing less than 24 hours earlier of Hezbollah›s most senior military commander in Beirut, concerns rose that the 10-month war in Gaza between Israel and Hamas is turning into wider conflict that could disrupt oil supply from the region.

“Oil markets are justifiably worried that the assassination of Haniyeh will bring Iran more directly into the war with Israel. And that could put at risk Iran’s oil supply and related infrastructure,” Commonwealth Bank of Australia analyst Vivek Dhar wrote in a client note.