Oil prices escalate on fears of heightened tensions in Middle East

Prices of oil were seen having escalated to its highest in more than a year today after a Saudi-led coalition fighting in Yemen said that it had intercepted an explosive-laden drone fired by the Iran-aligned Houthi group, raising fears of fresh Middle East tensions.

Hopes for more U.S. stimulus and an easing of Coronavirus lockdowns helped support the rally after prices gained around 5 per cent last week.

Brent crude was up 66 cents, or 1.1 per cent at $63.09 a barrel at 0004 GMT, after climbing to a session high of $63.44 the highest since January 22, last year.

U.S. West Texas Intermediate (WTI) crude futures gained 86 cents, or 1.5 per cent to $60.33 a barrel. It touched the highest since Jan. 8 last year of $60.77 earlier in the session.

The Saudi-led coalition fighting in Yemen has said that late on Sunday, it intercepted and destroyed an explosive-laden drone fired by the Iran-aligned Houthi group toward the kingdom.

U.S. President Joe Biden pushed for the first major legislative achievement of his term on Friday turning to a bipartisan group of local officials for help on his $1.9 trillion Coronavirus relief plan.

Oil prices have rallied over recent weeks also as supplies tighten, due largely to production cuts from the Organisation of the Petroleum Exporting Countries (OPEC) and allied producers in the group OPEC+.