Oil markets jumped on Monday on concerns over potential renewed US sanctions against Iran as well as conflict in Iraq, while an explosion at a US oil rig and reduced exploration activity supported prices there.
International Brent crude futures LCOc1 were at $57.82 (£43.47) Monday morning, up 65 cents, or 1.1 per cent, from the previous close.
Prices were being pushed up by worries over renewed U.S. sanctions against Iran.
Last Friday, US President Donald Trump refused to certify that Tehran is complying with the accord even though international inspectors say it is.
Under US law, the president must certify every 90 days that Iran is complying with the deal.
Congress will now have 60 days to decide whether to reimpose economic sanctions on Tehran.
During the previous round of sanctions against Iran, around 1 million barrels per day (bpd) of oil supplies were cut off global markets.
While analysts said they did not expect renewed sanctions to have such a big impact again, especially as the United States would likely act alone, they did warn that such a move would be disruptive.
There were also concerns about the stability of Iraq, the second biggest oil producer within the Organization of the Petroleum Exporting Countries (OPEC) behind Saudi Arabia.
Iraqi forces on Sunday began moving towards oil fields and an important air base held by Kurdish forces near the oil-rich city of Kirkuk, Iraqi and Kurdish officials said.
Greg McKenna, chief market strategist at futures brokerage AxiTrader said that “Trump’s reopening of the Iran nuclear issue, (and) the ongoing threat of the Kurdish pipeline being cut off” were the main factors pushing up oil prices.
An explosion overnight at an oil rig in Louisiana’s Lake Pontchartrain drew market attention, with at least six people injured.
US crude prices were further supported by drillers cutting back the number of rigs looking for new production.
US West Texas Intermediate (WTI) crude futures CLc1 were at $51.89 per barrel, up 44 cents, or 0.9 per cent.
Drillers cut five oil rigs in the week to 13 October, bringing the total count up to 743, the lowest since early June, General Electric’s Baker Hughes energy services firm said late on Friday.
On the demand side, oil consumption has been strong, especially in China, where the central bank governor said on Monday that the economy is expected to grow by 7 per cent in the second half of this year, accelerating from a forecast-beating 6.9 per cent in the first six months and defying widespread expectations for a slowdown.