SINGAPORE: Oil prices extended gains on Monday as efforts to end the U.S.-Israeli war on Iran appeared to have stalled, after a nuclear power plant in the United Arab Emirates came under attack and as U.S. President Donald Trump is expected to discuss military options on Iran.
Brent crude futures climbed $1.44, or 1.32%, to $110.70 a barrel by 2337 GMT after touching the highest since May 5 earlier in the session.
U.S. West Texas Intermediate was at $107.26 a barrel, up $1.84, or 1.75%, following a rise to its highest level since May 4.
Both contracts gained more than 7% last week as hopes of a peace deal that would end ship attacks and seizures around the Strait of Hormuz dimmed. Last week's talks between Trump and Chinese President Xi Jinping ended without an indication from the world's top oil importer that it would help resolve the conflict.
Drone attacks on the UAE and Saudi Arabia and rhetoric from the U.S. and Iran raised concerns of an escalation in the conflict.
Emirati officials said they were investigating the source of the strike on the Barakah nuclear power plant and that the UAE had the full right to respond to such "terrorist attacks."
Saudi Arabia, which intercepted three drones that entered from Iraqi airspace, warned it would take the necessary operational measures to respond to any attempt to violate its sovereignty and security.
"These drone strikes are a pointed warning - renewed U.S. or Israeli strikes on Iran could trigger more proxy attacks on Gulf energy and critical infrastructure by Iran or its regional proxies," IG market analyst Tony Sycamore said.
Trump is expected to meet top national security advisers on Tuesday to discuss options for military action regarding Iran, Axios reported. - Reuters
