Oil prices rise nearly 2% on Tuesday

Oil prices rose nearly 2 per cent on Tuesday, extending gains from the previous session, as stalled efforts to end the US-Iran war and continued disruption in the Strait of Hormuz raised concerns over supplies from the Middle East.

Brent crude futures climbed $2.32 to $110.55 a barrel by 0638 GMT after rising 2.8 per cent on Monday, marking a seventh straight session of gains. US West Texas Intermediate crude added $1.80 to $98.17 a barrel after a 2.1 per cent gain in the previous session.

A US official said President Donald Trump was dissatisfied with Iran’s latest proposal to end the conflict, while Iranian sources said Tehran’s offer did not address its nuclear programme until hostilities stop and Gulf shipping disputes are resolved.

The deadlock has left shipping flows through the Strait of Hormuz, which carries around 20 per cent of global oil and gas consumption, largely restricted, while the US blockade of Iranian ports remains in place.

Analysts said prolonged uncertainty was keeping risk premiums elevated, with DBS Bank expecting crude prices to trade between $100 and $125 a barrel if the conflict remains unresolved.

Attribution: Reuters