Oil prices climb Saudi tensions, demand outlook worsens

BEIJING (Reuters) – Crude oil futures rose on Monday, as geopolitical tensions over the disappearance of a prominent Saudi journalist raised concerns over supply, although worries over oil prices were rising. Long-term prospects for demand weighed on prices.

Crude markets were also buoyed by data showing that South Korea was not importing Iranian oil in September for the first time in six years, before US sanctions against the Middle East country took effect in November.

Brent rose $ 1.01, or 1.26%, to $ 81.44 a barrel, at 0424 GMT, on its way to its biggest daily gain since Oct. 9.

US crude futures climbed 80 cents, or 1.12 percent, to $ 72.14 a barrel, extending gains they made Friday after heavy losses on Wednesday and Thursday.

"The market has again raised concerns over geopolitical tensions in the Middle East after the United States and Saudi Arabia have exchanged comments on the disappearance of the Saudi journalist, which has resulted in higher prices" , writes Wang Xiao, head of crude research at Guotai Junan Futures. a research note.

Saudi Arabia has been under pressure since Jamal Khashoggi, a prominent Riyadh critic and US resident, disappeared on October 2 after visiting Saudi Arabia's consulate in Istanbul.

The kingdom will retaliate against possible economic sanctions taken by other states, the official SPA news agency reported on Sunday, citing an official source.

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

"South Korea's decision to stop imports of Iranian oil gives the market confidence in prices," said Chen Kai, head of research at Shengda Futures.

Persistent geopolitical concerns, trade concerns and weaker economic prospects could pave the way for another week of unstable negotiations, Chen said, adding that Monday's price recovery was "fragile".

Pressuring oil prices, the International Energy Agency, the Western energy watchdog, said in its monthly report that the market appeared "sufficiently supplied for the moment" and had Reduces expectations for growth in global oil demand this year and the following year.

This comes after the Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) said last week that the group believes the oil market is also well supplied and that it feared creating an overabundance next year.