The oil price rose for a fourth consecutive session Wednesday, closing close to $100 per barrel as renewed combat in the Middle East raised new worries about potential disruptions to global supply.
Brent crude futures rose 1.4 per cent to $99.33 a barrel by 0212 GMT, as US West Texas Intermediate crude futures rose 1.4 per cent to $94.34 a barrel.
Brent has climbed approximately 25% since early August and optimism for a decisive resolution to the conflict has subsided with violence spreading throughout the region.
The most recent escalation has comprised attacks by Iran-backed Houthis on several Saudi cities in Yemen. The developments have contributed to worries about the safety of oil production and transport lines in the region.
The U.S. has also attacked several Iranian oil tankers and Iran attacked a U.S. military base in Jordan, the report said.
The new wave of fighting coincides with Middle East oil supplies already being under strain due to attacks on key shipping routes and energy infrastructure.
Saudi Arabia has redirected some oil exports from the Strait of Hormuz, which is an attempt to ensure the flow of oil. But analysts cautioned that it could be more difficult to keep the crude flowing to international markets if attacks on the kingdom continue.
The latest developments may indicate that a return to peace negotiations may still be a long way off, and continue to carry a high risk premium for oil markets, ING analysts said.
The analysts at OCBC also noted that the impact of the attacks on the Saudi energy facilities and destruction of five Iranian tankers had raised concerns on a longer disruption to the oil supply.
Brent is nearing the $100 level and the region is closely monitored by investors for the potential of further damage to production facilities or shipping lanes, which would add to the pressure on the global oil market.
