Oil prices surged to six-month highs on Monday while Wall Street futures fell and safe-haven bets returned after weekend attacks on Saudi Arabia’s crude facilities knocked out more than 5 per cent of global oil supply.
The U.S. crude futures were last up 11 per cent at $61.10 a barrel, coming off highs on expectations other global oil suppliers would step in to lift output, while Brent crude soared 13 per cent at $68.06 after earlier rising to $71.95.
Yemen’s Iran-backed Houthi rebel group had claimed responsibility for the attack, which hit the world’s biggest oil-processing facility but a senior U.S. official told reporters on Sunday that evidence indicated Tehran was behind it.
The attacks heightened investor worries about the geopolitical situation in the region and worsening relations between Iran and the United States.
Those fears powered safe-haven assets, with prices for gold climbing 1 per cent in early Asian trade to $1,503.09.
“If risk appetite collapses due to fears of worsening middle east tensions in the wake of any retaliation to the drone attacks, some emerging markets could face a double whammy of pressures,” said Mitul Kotecha, Singapore-based senior emerging markets strategist at TD Securities.