Oil prices rise as Israel mulls response to Iranian attack

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Oil prices rise as Israel mulls response to Iranian attack

Oil prices rose Tuesday amid heightened tensions in the Middle East after Israel’s military chief said his country would respond to Iran’s missile and drone attack this weekend, despite calls to the restraint of the allies.

Brent crude futures for June delivery rose 46 cents, or 0.5 percent, to $90.56 a barrel at 0005 GMT. U.S. crude futures for May delivery rose 43 cents, or 0.5%, to $85.84 a barrel.

Oil prices ended Monday’s session lower after the Iranian attack on Israel proved less damaging than expected, initially allaying fears of a rapid escalation in the conflict that could shift crude barrels .

The attack, which Iran said was retaliation for an airstrike on its consulate in Damascus, caused only modest damage, with the missiles shot down by Israel’s Iron Dome defense system.

But Israeli Prime Minister Benjamin Netanyahu convened his war cabinet on Monday for the second time in less than 24 hours to consider how to respond to Iran’s first-ever direct attack on Israel, a government source said. This has raised market concerns that retaliatory measures could impact oil supplies.

Iran produces more than 3 million barrels per day of crude oil as a major producer in the Organization of the Petroleum Exporting Countries (OPEC). Benchmarks had risen on Friday in anticipation of Iran’s retaliation, with prices hitting their highest level since October. In China, the world’s largest oil importer, official gross domestic product figures due Tuesday are expected to show growth slowing to 4.6% year-on-year, compared to 5.2% in the previous three months. That would keep pressure on policymakers to unveil more economic stimulus measures that could push oil prices higher.

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