$Rex Intl (5WH.SG)$$RH PetroGas (T13.SG)$$Dyna-Mac(Delisted)...

Oil prices gained about 1% on Thu after Iran seized an oil tanker off the coast of Oman, raising the prospect of escalating conflict in the Middle East.

Brent futures rose 0.8% to settle at USD77.41 , while WTI crude 0.9% to settle at USD72.02.

Earlier in the session, both benchmarks were up over USD2 but have pulled back on an unexpected increase in U.S. inflation and reports China was seeking fewer Saudi imports.

Oil prices rose more than 2% on Fri as the United States and Britain carried out strikes against Houthi military targets in Yemen in retaliation for attacks by the Iran-backed group on shipping in the Red Sea starting from late last year.

U.S. diesel and gasoline futures led energy markets higher with diesel, which is also used as a heating fuel, gaining about 3% to a three-week high on forecasts for extreme cold across much of the U.S. next week.

"The best kind of rally in the crude oil space is one that is led by the products ... as long as the refiner needs to make more product, he is going to need to buy more crude oil," said Bob Yawger, director of energy futures at Mizuho Bank.

Global trade declined by 1.3% from November to December 2023 as militant attacks on merchant vessels in the Red Sea led to a plunge in the volumes of cargo transported in the region.

"Slowing demand, unrest in Middle East and muted price reaction have producers, consumers and market participants alike feeling paranoid about oil prices," Barclays said as the bank lowered its 2024 Brent forecast by $8 to $85 a barrel.

prices were up even though U.S. data showed consumer inflation rose 3.4% in Dec on a yearly basis versus a 3.2% increase expected by economists polled by Reuters.

The higher-than-expected rise in inflation could delay a much anticipated interest rate cut in Mar from the Fed.

"Given that markets have continued to price in rate cuts in Mar, a delay of the currently anticipated timeline would dampen investor sentiment, likely bringing (crude) price declines with it," analysts at energy consulting firm Gelber and Associates said.

Lower interest rates would reduce consumer borrowing costs, which could boost economic growth and demand for oil.