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Why did oil prices rise by more than 2% today?


Mark Michaels

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Oil prices jumped high today as tensions continue to escalate following Iran's seizure of a British oil tanker, which might heavily impact the supply system.

Futures of Brent crude climbed over 2% today settling at $64.02 per barrel. US oil prices advanced as well and reached $56.83.

“The events in the Gulf have definitely taken the market into a more bullish territory in today’s trading,” said Erik Norland, CME Group. “But that doesn’t mean markets will continue to go higher, and previous incidents in the Gulf haven’t driven up prices much – suggesting that investors’ calculus, rightly or wrongly, is that war is not very likely.”

Iran seized a British-flagged oil tanker in the Gulf on Friday, responding to the UK doing the same to one of its tankers earlier in July.

Investors are concerned whether the problems will continue to happen in the Strait of Hormuz, the most important place for the global supply of oil in the world.

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