Brent crude rose towards US$111 a barrel as Israel's bombing of the Gaza Strip sparked concerns around the supply of oil from the Middle East, as per Reuters. Hamas fired dozens of rockets into southern Israel, killing three, and Israel launched numerous air strikes across the Gaza Strip as the military showdown lurched closer to all-out war. Brent crude rose to US$111.1, while in US, oil rose to US$86.6.
While events in Gaza themselves do not directly threaten supplies, oil markets are extremely sensitive to violence in the Middle East, which produces a third of the world's oil. Traders worry that any escalation of the trouble between Israel and the Palestinian territories could draw in Arab producers or affect their supply lines.
Disruption to Norway's oil production also provided support. Statoil shut its massive Troll C oil and gas platform in the North Sea due to corrosion in a gas treatment system, reducing Norway's oil production by around 8%.