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Oil prices rose on Tuesday and Brent crude hovered near its highest level in five months, as traders factored in a geopolitical risk premium resulting from Houthi attacks on Saudi infrastructure and reports of attacks on ships in the Gulf.
Brent crude futures rose 55 cents, or 0.50 percent, to $110.10 a barrel by 0319 GMT, after climbing to $110.70 a barrel in the previous session, the highest level since May 20.
US West Texas Intermediate crude futures for November delivery, which expire on Tuesday, increased 0.24 percent to $103.91. The more actively traded December contract rose 39 cents, or 0.40 percent, to $98.93.
ING analysts said in a note on Tuesday, "Oil prices remain well supported... this suggests that the market is pricing in a significant risk premium, given the volatile situation."
They added, "However, if flows continue unimpeded despite the geopolitical situation, the risk premium is likely to slowly diminish. Clearly, there are no signs of that yet."
Ship-tracking firm Kpler stated in a note on Monday that reports indicated at least 18 ships had been attacked over two weeks, which keeps the risk premium unchanged.
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