Crude oil futures extended gains in mid-afternoon trade in Asia Friday following the news of a Suezmax tanker catching fire and spilling oil after being hit by a “foreign object” near Jeddah. At 3:12 pm in Singapore (0712 GMT), ICE Brent December futures were up $1.23/b (2.08%) from Thursday’s settle at $60.33/b, while the NYMEX November light sweet crude futures contract was $1.04/b (1.94%)higher at $54.59/b.”The ship laden with 1 million barrels of crude was hit by an object which could be a missile or a mine and this has resulted in an explosion that is causing an oil spill,” a market source tracking the tanker market told S&P Global Platts.

According to Al Jazeera, the National Iranian Tanker Company said on Friday that the hull of the ship sustained two separate explosions about 100km (60 miles) off the Saudi port city of Jeddah.”Brent crude can be seen breaking past the $60 handle, one aided by supply concerns with the tanker explosion off the coast of Saudi Arabia,” IG’s market strategist Pan Jingyi said. “The potential for this latest incident to be a terrorist attack packs the potential for prices to be affected in the near term,” Pan added.

“I believe that the primary driver of crude price now is the tanker incident off Jeddah…people are pricing in the explosion, which explains the boosted sentiments,” Benjamin Lu, investment analyst at Phillips Futures, said. Meanwhile, reports that OPEC have not ruled out deeper output cuts if demand concerns linger. OPEC, Russia and their allies have not ruled out deeper oil output cuts ahead of the OPEC meeting in Vienna come December 5-6, OPEC secretary general Mohammed Barkindo said Thursday.