Crude oil futures jump 4% amid news of tanker fire in Oman

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Singapore —
Crude oil futures spiked as high as 4% during mid-afternoon trade in Asia Thursday following news of a tanker fire near the Gulf of Oman.

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At 03:09pm Singapore time (0709 GMT), the August ICE Brent futures were up $1.73/b (2.88%) from Wednesday’s settle at $61.70/b, while the NYMEX July light sweet crude futures contract was $1.29/b (2.52%) higher at $52.16/b.

Earlier on, the front-month August ICE Brent crude futures hit an intra-day high of $62.64/b Thursday afternoon in Asia, rising more than 4% from Wednesday’s settle.

“I believe the spike in oil futures could be due to the tanker fire incident in Oman,” IG’s market strategist Pan Jingyi said. “On the supply side, there is a general concern that this could choke up supplies for awhile,” Pan added.

The 2016 built and Marshall Island flagged, Long Range II tanker, the Front Altair has caught fire near the Gulf of Oman amid concerns over a possible attack, multiple shipping sources in Singapore and Shanghai said Thursday.

While the cause of the fire could not be immediately ascertained, brokers, chartering sources and a shipping agent confirmed that at least two tankers, including the Front Altair, have been damaged and its crew has been evacuated.

So far no formal statement has been issued from the port authorities in the region.

“Concerns over supply disruptions very much remain,” said Sohyun Kim, a commodity strategist at Daishin Securities based in Seoul.

“The [ICE Brent] oil futures market structure has been backwardated for quite a while and financial market participants are mostly seeing more upside risk than downside,” Kim said.

As of 0309 GMT, the US Dollar Index was 0.6% lower at 96.895.

–Ng Jing Zhi,

–Edited by Nurul Darni,