Oil Heads Higher As Countries Break With Qatar

Both Brent crude futures and U.S. WTI futures were broadly higher during Monday’s Asian session as Saudi Arabia, Egypt, Bahrain and the United Arab Emirates broke ties with Qatar on fears that Doha’s connections to terrorism would cause issues of national security. Qatar has long supported the Muslim Brotherhood, the world’s oldest Islamist movement. The country is also the biggest global supplier of liquefied natural gas (LNG) and a prominent seller of condensate, a form of liquid fuel that is derived from natural gas. The world’s largest gas field, South Pars, is shared between Qatar and Iran, a collaboration which many countries think joins the two countries not just in business dealings but also ideologically. 

U.S. WTI futures were up 1.20 percent as of 6:02 a.m. GMT on Monday, to $48.23 per barrel, while Brent crude futures were up 1.24 percent to $50.55 per barrel.  

Terrorist attacks in England over the weekend prompted the denunciations of Qatar with Saudi Arabia accusing the country of backing militant groups and spreading their violent ideology. Bahrain, a close Saudi ally, also accused Qatar of undermining regional stability. The UAE gave Qatari diplomats 48 hours to leave the country.  

After the weekend attacks, sterling struggled in early Asian trade but later recovered most of its losses to trade within range at $1.2868. The dollar was slightly higher against the yen, up 0.25 percent to 110.68, despite U.S. non-farm payroll reports which showed an increase of only 138,000 jobs, down dramatically from the 185,000 expected. The NFP report out last Friday showed that the U.S. labor market may be slowing down.U.S. unemployment now stands at 4.3 percent, a 16-year low.