Oil prices rise amid Saudi tensions, but demand outlook drags

BEIJING: Crude oil futures rose on Monday as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked worries about supply, although concerns about the long-term outlook for demand dragged on prices.

Crude markets were also supported in the wake of data that showed South Korea did not import any oil from Iran in September for the first time in six years, before U.S. sanctions against the Middle Eastern country take effect in November.

Brent crude had risen 98 cents, or 1.22 percent, to 81.41 a barrel by 0710 GMT, on track for its biggest daily gain since Oct. 9.

U.S. crude futures climbed 45 cents, or 0.62 percent, to $71.77 a barrel, extending gains they racked up on Friday after hefty losses on Wednesday and Thursday.

“The market has again expressed concerns over geopolitical tensions in the Middle East after U.S. and Saudi traded comments over the disappearance of the Saudi journalist, leading to a jump in prices,” Wang Xiao, head of crude research with Guotai Junan Futures, wrote in a research note.

Saudi Arabia has been under pressure since Jamal Khashoggi, a prominent critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul.

The kingdom would retaliate against possible economic sanctions taken by other nations over the case, its state news agency SPA reported on Sunday quoting an official source.

Meanwhile, South Korea in September stopped importing Iranian oil for the first time in years.

Societe Generale revised its forecast for Brent prices in the final quarter of this year to $82 per barrel, up from $78 previously.

The French bank said in a note that there were “high levels of risk and uncertainty in the oil markets”.