Oil prices jump 2% after fresh US strikes on Iranian military site

Oil prices jumped about 2 per cent in early Thursday trading after Reuters ​reported fresh US strikes overnight on an ​Iranian military site, escalating tensions even as Washington ‌and Tehran negotiate to end their three-month conflict.

Brent crude futures rose $1.90, or 2.02 per cent, to $96.19 a barrel by 0015 GMT, while the more active August contract gained $1.64 or 1.78 per cent, to $93.89. The July contract is set to expire on Friday.

The US West Texas Intermediate futures were up $1.73, or 1.95 per cent, at $90.41.

Both benchmarks slipped more than 5 per cent to touch their lowest in a month in ‌the previous session on the possibility of a US-Iran deal to end their war and reopen the Strait of Hormuz.

 

The US military launched new strikes in Iran targeting a military site that officials believed posed a threat to US forces and commercial maritime traffic in the strait, ​a US official told Reuters.

"Oil supply remains constrained, and key sticking points ‌have yet to be resolved," ANZ commodity strategist Daniel Hynes said in a note.

In the US, ​crude ‌oil stockpiles fell by 2.8 million barrels last week, the sixth ‌straight week of declines, according to American Petroleum Institute data. [API/S]

Official inventory data from the US Energy Information Administration ‌is ​due on Thursday, ​a day later than usual due to the Memorial Day holiday on Monday.