Oil jumps to seven-year high

Oil jumped to a seven-year high early on Tuesday, a day after Yemeni Houthis attacked targets in the United Arab Emirates (UAE) with drones.

The attack and the continued tightness in the oil market lifted prices, reports oilprice.com.

As of 8:04 a.m. EST on Tuesday, WTI Crude was up 1.20% at $84.90. Brent Crude traded at $87.20, up 0.76%, having risen to $87.80 earlier in the day and hitting the highest price since October 2014.

Apart from the numerous signs of tightness in the physical crude market, oil futures reflected on Tuesday the growing risk premium after the attack on the UAE in the most important oil-producing and exporting region in the world.

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An attack with drones on Monday, for which the Houthi rebels aligned with Iran later claimed responsibility, killed several people, and blew up fuel tanker trucks near storage facilities owned by the Abu Dhabi National Oil Company (ADNOC).

The United States strongly condemns the attack, U.S. National Security Advisor Jake Sullivan said, adding that “Our commitment to the security of the UAE is unwavering and we stand beside our Emirati partners against all threats to their territory.”

The Houthis claim there will be further attacks.

“This operation is a prelude and there are still a lot of surprises in the pocket of our military forces,” Abdulmalik Al-Ejri, a Houthi leader, told Al-Masirah, as carried by Bloomberg.

The implication of rising oil prices for Nigeria is always double-edged.

Nigeria’s foreign exchange earnings will increase, while at the same time, the imported price of refined fuel will also increase.