Oil price jumps above $114 a barrel on Iran-US fears
Oil prices rose as analysts at the bank ING said renewed escalation between Iran and the US now looks the most likely outcome.
A barrel of Brent crude rose to more than $114, up $6 from Monday. A barrel of US crude rose to more than $100.
Analysts at ING wrote that oil is rising because markets are increasingly worried about the risk of renewed escalation of tensions between Iran and the US. "That is a scenario that could threaten oil supply," they wrote.
The analysts stressed that current developments in the Middle East do not paint an optimistic picture. They said the developments call into doubt ING's long-held view that the US midterm elections would lead to de-escalation and a normalisation of trade flows and oil prices.
"In fact, renewed escalation looks the most likely," the analysts said. "As a result, our expectation that Brent would average 80 dollars a barrel in the fourth quarter looks unattainable."
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ING
ING is a Dutch multinational bank headquartered in Amsterdam, offering retail, business and wholesale banking services in many countries. Its economists and analysts publish regular market research, including commentary on oil, currencies and interest rates, which is widely read by investors and the financial press in the Netherlands.