Oil prices shot up to break new records on Monday following tensions between Saudi Arabia and Yemen, and with the US Senate passing the $1.9 trillion COVID-19 relief bill.
International benchmark Brent crude was trading at $70.54 per barrel at 0715 GMT for a 1.70% increase after closing Friday at $69.36 a barrel.
American benchmark West Texas Intermediate (WTI) was at $67.11 per barrel at the same time for a 1.54% increase after it ended the previous session at $66.09 a barrel.
Oil prices closed last week with almost 7% weekly gains as the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC countries, known as OPEC+, announced their decision to keep the current production level unchanged, rather than increasing it in line with rising oil prices.
Brent breached the $71 threshold as it reached $71.11, a level not seen since Jan. 8, 2020, when it traded at $71.75, while WTI hit its highest level since Oct. 23, 2018, with trade at $67.98.
The OPEC+ move is still the main driver of oil prices. However, the upward trend gained momentum after the Saudi Arabian energy ministry reported an attack by the Yemeni rebel group, the Houthi movement, on Saudi Aramco’s facilities and the petroleum tank farms at the Ras Tanura Port, one of the world's largest oil shipping ports.
The ministry said although no injuries or serious damages were reported, shrapnel from a ballistic missile fell near Saudi Aramco’s residential area in the city of Dhahran, where thousands of the company’s employees and their families from different nationalities live.
Adding more to the bullish oil prices, the US Senate passed President Joe Biden's much-awaited $1.9 trillion COVID-19 relief bill, sending it back to the House of Representatives for approval.
The bill has now been sent to the House of Representatives where it will be voted on again in the coming days, after which it will then be sent to the White House. Biden needs to sign it before March 14 if unemployment benefit programs are to be renewed.
The package includes direct payments of up to $1,400 to most Americans and $300 weekly benefits for the unemployed into September. The bill lowered the $400 weekly support through August that passed the House last Saturday.
By Sibel Morrow