Oil rises after reports of Iranian tanker attack

Oil rises after reports of Iranian tanker attack
Oil rises after reports of Iranian tanker attack

Oil prices rose as high as $60.65a barrel on Friday after Iranian media said a state-owned oil tanker had beenstruck by missiles in the Red Sea near Saudi Arabia, but bearish oil demandforecasts soon pulled crude off session highs.

The Iranian Suezmax crude tankerSabiti was ablaze and suffered heavy damage after being hit by two missiles,Iranian media reported.

Both oil benchmarks recordedtheir biggest daily rise since Sept. 16, the first trading day after theattacks on Saudi installations knocked out more than half of the kingdom'scrude output and temporarily pushed oil prices up by about 20%.

International benchmark Brentcrude futures were up 98 cents at $60.08 a barrel by 0936 GMT. U.S.West Texas Intermediate (WTI) crude futures rose 95 cents to $54.50 .

Iranian oil exports are underU.S. sanctions that have diminished Iran's impact on the global supply picture.

"The market still has freshmemories of the Saudi Arabia attacks and the very quick price reversalsafterwards. The price results of attacks this year have not been sustained interms of risk premium," said Petromatrix analyst Olivier Jakob.

"In terms of oil prices, theimpact is limited unless you think Iran is going to retaliate in the Strait ofHormuz … It's going to be more supportive in the freight market. Potentiallyit can increase insurance premiums (on tankers)."

The United States has issued sanctions on units of Chinese shipper COSCO, alleging involvement in ferrying crude out of Iran, which has boosted rates for oil tankers.

Tensions in the Middle East haveescalated in the wake of attacks on tankers and U.S. drones in the Strait ofHormuz, a key shipping artery for global oil trade.

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