Oil jumps as Iran rocket strike on U.S. forces jolts markets

Jan 08, 2020 News

TOKYO (Reuters) – Oil prices jumped to their highest in months today after Iran attacked American forces in Iraq in response to a U.S. strike that killed an Iranian general last week, raising the specter of a spiraling conflict and disrupted oil supplies.

Prime Minister Boris Johnson (Reuters photo)

But prices cooled a fraction after the early heat as analysts said market tension could ease as long as oil production facilities remain unaffected by attacks.
Brent crude futures rose $1.56, or 2.3%, to $69.83 by around 0207 GMT, after earlier rising to $71.75, the highest since mid-September 2019.
West Texas Intermediate crude futures climbed $1.25, or 2%, to $63.95 a barrel. It earlier reached a high of $65.85, the most since late April last year.
Iran’s missile attack on U.S.-led forces in Iraq came early on Wednesday, hours after the funeral of Qassem Soleimani, the commander of the country’s elite Quds Force killed in a U.S. drone stroke on Jan. 3.
Tehran fired more than a dozen ballistic missiles from Iranian territory against at least two Iraqi military bases hosting U.S.-led coalition personnel, the U.S. military said on Tuesday.
“It’s getting really serious … but there is a feeling of achievement in terms of technical charts as Brent has surged to above $70/barrel and near a high in September, 2019 after attacks on Saudi Arabian oil sites,” said Hideshi Matsunaga, analyst at Sunward Trading in Tokyo.
“We have to see how much and what damage the latest attacks have caused, but oil markets may come down, just like last September, if we can confirm that oil facilities have not been affected,” he said.
Iranian news agency Mehr said Iran’s Islamic Revolutionary Guard Corps had targeted the base. Tehran has vowed retaliation for the killing of military commander Soleimani.
Sirens were heard and American helicopters were seen flying over Iraq’s Ain al-Asad air base in Anbar province early on Wednesday, according to Iraqi broadcaster al Mayadeen.
“We are working on initial battle damage assessments,” Pentagon spokesman Jonathan Hoffman said in statement, adding that the bases targeted were at Al-Asad air base and another in Erbil, Iraq.

UK’s Johnson to tell EU chief: no extension to trade deal talks

LONDON (Reuters) – Prime Minister Boris Johnson will tell European Commission Chief Ursula von der Leyen that Britain will not extend its transition out of the European Union beyond Dec. 2020, and is not seeking a new relationship based on alignment with existing rules.
The British leader is due to meet von der Leyen in London on Wednesday for the first time since the commission president, who will play a pivotal role in talks to thrash out new arrangements between Britain and the EU, took office in December.
Johnson won an election last month by promising to deliver Brexit on Jan. 31 and use an 11-month transition period to negotiate a deal that will define terms between the world’s fifth-largest economy and its biggest trading partner.
A statement from Johnson’s office ahead of the visit said he would “stress the importance of agreeing a confident and positive future relationship by the end of December 2020.”
It added: “The prime minister will likely underline that the upcoming negotiations will be based on an ambitious FTA (Free-Trade Agreement), not on alignment.”
Von der Leyen has previously cast doubt on the chances of concluding such a complicated trade agreement within a relatively short space of time, with similar deals having taken years to thrash out and implement.
British Brexit minister Stephen Barclay, and EU Brexit negotiator Michel Barnier will also take part in the meeting.

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