Oil on the rise

Oil is rising as Israel looks to respond to Iran’s jittery rhetoric. Oil has gained on Israel’s promise to respond to Iran’s attack, keeping tensions high in the Middle East. The global benchmark Brent climbed to $91 a barrel after a modest decline on Monday, while U.S. crude was trading above $86. Senior Israeli military officials said their country had no choice but to respond to Tehran’s weekend attack, despite calls from European and U.S. officials for restraint. Investors’ focus is now shifting to the nature and timing of Israel’s next move. Western and Arab countries are trying to convince Prime Minister Benjamin Netanyahu that an aggressive response to Iran’s attack would harm Israel’s interests. Iran accounts for about a third of global crude supplies from the Middle East. The possibility of a direct response from Israel “means that this uncertainty and tension is going to continue for some time, and as we see escalation, we are more likely to see oil supplies from the region affected,” said Warren Patterson, head of commodity strategy at ING Groep NV in Singapore. Oil has rebounded this year as OPEC+ supply cuts and rising geopolitical risks in Russia and the Middle East have pushed prices higher. Consumption in leading economies is also holding up well, with data on Tuesday showing China’s first-quarter growth beat expectations as oil demand picked up. There were also signs of strength in some products, including U.S. gasoline.