Oil Prices Rise Amidst Jitters Over Saudi Arabia

Investing.com – Oil prices rose on Monday morning in Asia following tensions between the U.S. and Saudi Arabia on the sudden disappearance of a Washington Post columnist Jamal Khashoggi, with whom the Kingdom denied any involvement.

for November delivery gained 1.12% to $72.13 per barrel at 12:40 AM ET (04:40 GMT) on the New York Mercantile Exchange, while for December delivery rose 1.22% to $81.41 a barrel on London’s Intercontinental Exchange.

Saudi Arabia is under intense pressure, as the missing Saudi journalist and royal critic Khashoggi went missing after he was last seen entering the Saudi consulate in Istanbul on Oct. 2 to obtain a document for tying the knot with his Turkish fiancée, according to CNN. As Saudi Arabia is one of the largest oil exporters in the world, this news has sparked market concerns on the oil market.

“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, told Reuters on Monday.

On Sunday, CNBC reported that the governments of the U.K., France and Germany also urged a “credible investigation to establish the truth about what happened, and – if relevant – to identify those bearing responsibility for the disappearance of Jamal Khashoggi, and ensure that they are held to account.”

In an interview with CBS news, U.S. President Donald Trump pledged to inflict “severe punishment” in Saudi Arabia for the disappearance of Khashoggi. However, he left out the option of slapping sanctions on the country and said he would not halt the sales of military equipment to the kingdom.

“I’ll tell you what I don’t want to do,” Trump told CBS. “I don’t want to hurt jobs. I don’t want to lose an order like that. And you know what, there are other ways of punishing. There’s a lot at stake. And, maybe especially so because this man was a reporter. There’s something, you’ll be surprised to hear me say that, there’s something really terrible and disgusting about that if that were the case. We’re going to get to the bottom of it and there will be severe punishment.”

On the demand side, Reuters reported that South Korea halted its oil imports from Iran for the first time in years.

“South Korea’s move to stop Iran oil imports is giving the market confidence on prices,” Chen Kai, head of research with futures brokerage Shengda Futures, said.

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