Oil prices rose more than 2% on Friday after Iranian media said a state-owned oil tanker was attacked in the Red Sea near Saudi Arabia, while optimism surrounding the U.S.-China trade war lifted sentiment. Brent crude futures LCOc1 gained $1.41, or 2.4%, to settle at $60.51 a barrel. West Texas Intermediate (WTI) crude CLc1 futures rose $1.15, or 2.2%, to settle at $54.70 a barrel.
The gains were tempered by the International Energy Agency’s forecast for weakened demand in 2020. Still, Brent and WTI were headed for their first weekly increases in three weeks. Brent rose 3.7% for the week, while WTI gained 3.6%. The Iranian Suezmax crude tanker was struck in the Red Sea off Saudi Arabia’s coast on Friday, Iranian media said, with various reports differing on the level of damage caused.
The National Iranian Tanker Company (NITC) said the ship was damaged but stable and denied reports it had been set ablaze. “We estimate that the tanker event is worth about $1/bbl of risk premium that could easily be erased within a couple of sessions if no blame is assessed and no follow up incidents develop,” Jim Ritterbusch, president of oil trading advisory firm Ritterbusch and Associates, said in a note.