Top Stories
Top Stories
Wires

UPDATE 5-Oil prices up as Middle East tanker attacks heighten supply concerns

Ahmad Ghaddar

* Two tankers damaged in attacks near Gulf

* U.S.-China trade tensions cap gains

* U.S. energy companies cut drilling rigs (Adds Chinese tariffs on U.S., updates prices)

LONDON, May 13 (Reuters) - Oil prices were lifted on Monday by growing concern over supply disruptions in the Middle East even as investors and traders fretted about global economic growth prospects amid a standoff in the Sino-U.S. trade talks.

Brent crude futures were at $72.43 a barrel by 1321 GMT, up $1.81.

U.S. West Texas Intermediate (WTI) futures were up $1.49 at $63.15.

Saudi Arabia on Monday said that two Saudi oil tankers were among vessels attacked off the coast of the United Arab Emirates, condemning it as an attempt to undermine the security of global crude supplies.

The UAE had said on Sunday that four commercial vessels were attacked near Fujairah, one of the world's largest bunkering hubs. The port lies near the Strait of Hormuz, one of the world's most important oil export waterways.

Iran's foreign ministry described the incidents as "worrisome and dreadful" and called for an investigation.

Saudi Arabia and the UAE are the largest and third-largest producers respectively in the Organization of the Petroleum Exporting Countries (OPEC).

"Reports on Sunday of explosions in Fujairah are likely to add further impetus to a potentially growing risk premium in the region, with initial reports suggesting oil tankers specifically were targeted in an apparent sabotage," said Vienna-based consultancy JBC Energy.

The government of Fujairah, one of the seven emirates that make up the UAE, in a tweet denied media reports about blasts inside Fujairah port and said the facility was operating normally.

Markets have been supported by Washington's efforts to cut Iran's oil exports to zero and reduce exports from Venezuela, where infrastructure problems have also cut output.

The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and world powers last year.

But the trade friction between Washington and China, which intensified last week, will keep a lid on prices.

China plans to impose tariffs on $60 billion worth of U.S. goods, the Chinese finance ministry said on Monday.

The United States and China together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed.

The trade turmoil has prompted hedge funds to cut their bullish wagers on U.S. crude oil to the lowest level in a month and raised their bets on Brent crude to the highest in nearly seven months, U.S. government data showed on Friday.

Separately, in an early indicator of future output, U.S. energy companies last week reduced the number of oil rigs operating for the third time in four weeks, cutting them by two and bringing the count down to 805.

(Additional reporting by Colin Packham in Sydney and Aaron Sheldrick in Tokyo Editing by Jason Neely and David Goodman)