NYMEX September crude and ICE September Brent futures both rallied $3/barrel Thursday on a combination of Middle East tensions and technical factors.
NYMEX September crude rose $3 to $93.17/b then reached a session high of $93.22/b.
ICE September Brent gained $3 to $108.16/b then got as high as $108.18/b.
"Geopolitical and technical factors are the drivers here, with background event risk also a notable factor," said Mike Guido, managing director/energy markets at Macquarie. "Despite weak US economic numbers, there appears to be new money coming into both flat price and spreads with both barrels running very lean in terms of net length."
Analyst Gene McGillian of Tradition Energy concurred, noting the influx of new speculative length into NYMEX front-month crude, once it breached $90/b on increased geopolitical tensions.
Mounting violence in Syria, rising tensions with Iran and the bombing of a bus carrying Israeli tourists in Bulgaria was keeping the oil complex well supported, analysts said.
Israeli officials Thursday accused Iran and Lebanese group Hezbollah of carrying out the Bulgaria attack, which killed five Israelis and injured more than 30, setting the stage for new tensions in the Middle East, according to an AFP report.
In addition to geopolitical risk, Guido said there was some forward price action in Brent futures ahead of maintenance at the North Sea Buzzard field in September.
Maintenance at the 220,000 b/d capacity field will begin in the first week of September and return to full output in mid-October (See story, 1013 GMT).
