OIL RISES ON FEARS OF HEIGHTENED MIDEAST TENSIONS

Oil prices rose to their highest in more than a year on Monday, after a Saudi-led coalition fighting in Yemen said it intercepted an explosive-laden drone fired by the Iran-aligned Houthi group, raising fears of fresh Middle East tensions, Yuka Obayashi reported for Reuters.

Hopes for more US stimulus and an easing of coronavirus lockdowns helped support the rally after prices gained around 5% last week. Brent crude was up 66 cents, or 1.1%, at $63.09 a barrel at 0004 GMT (8:04 a.m. in Manila), after climbing to a session high of $63.44, the highest since Jan. 22, 2020.

US West Texas Intermediate (WTI) crude futures gained 86 cents, or 1.5%, to $60.33 a barrel. It touched the highest since Jan. 8 last year of $60.77 earlier in the session.

The Saudi-led coalition fighting in Yemen said late on Sunday it intercepted and destroyed an explosive-laden drone fired by the Iran-aligned Houthi group toward the kingdom, state TV reported. “An early spike in oil markets was triggered by the news,” said Kazuhiko Saito, chief analyst at commodities broker Fujitomi Co.

“But the rally was also driven by growing hopes that a U.S. stimulus and easing of lockdowns will boost the economy and fuel demand,” he said. WTI may be pulled back by profit-taking as it reached a key $60 level, he added.

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