Oil prices rise amid concerns about supply disruptions

Oil prices rose on Monday after a drone attack on US forces in Jordan and an escalation in Houthi attacks on ships in the Red Sea stoked fears of supply disruptions.

According to Reuters, Brent crude futures rose 21 cents to $83.67 a barrel by 1117 GMT, and US West Texas Intermediate crude futures rose 21 cents to $78.22.

The risks of the conflict expanding in the Middle East increased after Iranian-backed militants launched a drone attack on US forces in Jordan on Sunday.

Trafigura Primary Commodities Trading Company said that it is evaluating the security risks that may result from the continued passage of ships in the Red Sea after extinguishing a fire that broke out on board a tanker that was attacked by the Yemeni Houthi movement.

“Supply disruptions were limited, but that changed on Friday after an oil tanker operating for Trafigura was hit by a missile off the coast of Yemen,” ANZ analysts said in a note.

On Monday, a Hong Kong court ruled to liquidate the giant China Evergrande Real Estate Group, an indication of the worsening crisis in the real estate sector in China, which was reflected in the sentiment of demand for crude in the world’s largest oil importer.

Russia is likely to reduce its exports of naphtha, an intermediate material used in the petrochemical industry, to between 127,500 and 136,000 barrels per day, or about a third of total exports, after operations were disrupted at refineries on the Baltic and Black Seas as a result of fires, according to traders and ship tracking data from the group London stock exchanges.

The attacks on Russian oil facilities were renewed on Monday, as the Russian authorities announced that air defenses thwarted a drone attack on the Slavneft-Janus refinery in the city of Yaroslavl, northeast of Moscow.