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Sun 16 Jun 2019 10:48 AM

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Oil price surges on news of tanker attacks, GCC stock down

Two attacks on tankers in the Strait of Hormuz dented investor confidence, while oil benefitted

Oil price surges on news of tanker attacks, GCC stock down

The attacks on two oil tankers in the Strait of Hormuz on Thursday has seen the price of oil surge, while rising tensions in the region led to a dip in regional stock markets.

The US Fifth Fleet said two oil tankers were damaged in an incident near the Strait of Hormuz that one of the ships’ operators described as a suspected attack.

The Trump administration later on Thursday put the blame on Iran for the attacks.

Oil prices were sliding in recent week but the attacks led to a surge of 4.5 percent on Thursday when news of the attacks broke.

On Friday, Brent futures rose 1.1 percent to $62.01 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 0.4% to close at $52.51.

"This is a fairly small increase given the uncertainty and the potential knock-on effects of attacks such as these. This partially reflects the fact that the oil market has already priced in the supply and geopolitical risks emanating from Iran," Cailin Birch, economist at The Economist Intelligence Unit, told Reuters on Friday.

While oil benefited, the regional markets on Thursday closed down, as investors were weary of what the rising tensions in the region would mean for the short-term outlook.

Saudi share fell 1.6 percent, with petrochemical maker Saudi Basic Industries down 2.2 percent. Dubai’s index lost 1.2 percent, with Abu Dhabi slipping just 0.5 percent.