Adds latest prices, details of FT report in paragraphs 1-6; new Shaybah attack in paragraph 11
Crude futures surged by more than 30pc on Monday in one of the biggest single-day increases on record, but later gave up some gains after the Financial Times (FT) reported that the International Energy Agency (IEA) and G7 countries are considering a joint release of oil stocks.
The front-month May Ice Brent contract rose as high as $119.50/bl, up by 29pc or $26.81/bl from the close on 6 March, after a weekend of continued attacks and growing signs of oil supply disruptions in the Middle East.
US benchmark WTI rose even more sharply, with the front-month April contract increasing by 31pc or $28.58/bl from the close on 6 March to a high of $119.48/bl.
Futures prices then fell back from their session highs after the FT said that the IEA and G7 finance ministers are due to hold a call later today to discuss a possible co-ordinated release from oil inventories.
Three G7 countries, including the US, have expressed support for the idea, the FT said, citing people familiar with the talks.
Crude futures fell by around $10/bl after the report was published, but were still trading up by as much as 16pc on the day as of 14:15 Singapore time (06:15 GMT) — at around $108/bl for Brent and $103/bl for WTI.
Today's new highs mean futures have now risen by around 65-78pc since 27 February, the day before the US-Iran war started.
Oil prices are likely to drop rapidly once "the destruction of the Iran nuclear threat is over", US president Donald Trump said on his social media platform shortly after prices began to surge today. The rise in prices is "a very small price to pay for USA, and World, Safety and Peace", Trump said.
Kuwait's state-owned oil firm KPC said on 7 March that it has started to reduce crude output and refinery runs after oil exports were effectively halted by the war.
Kuwait is the second Mideast Gulf country to confirm production shutdowns because of the war. Upstream shutdowns are also expected in Saudi Arabia, the UAE, Qatar and Iran should the war continue.
There has been no sign of an end to the conflict in the Middle East, which is now in its tenth day. Saudi Arabia's giant 1mn b/d Shaybah field was again targeted by several drones early on Monday, but all were detected and intercepted, the Saudi defense ministry said.
Over the weekend, Israel struck fuel storage tanks in Iran, causing a huge fire, while Iran continued to fire drones and missiles at Israel and US allies in the region.
