By: Economy Middle east

Oil prices surged by more than 5 percent on Thursday after President Donald Trump said the United States would continue its strikes on Iran, without giving any clear timeline for when the war might end, heightening market concerns over prolonged supply disruptions.

By 5:10 GMT, Brent crude futures had jumped $5.88, or 5.81 percent, to $107 a barrel, while U.S. West Texas Intermediate crude futures gained $4.86, or 4.85 percent, to reach $105 a barrel.

The rebound came after both benchmarks had earlier fallen by more than $1 ahead of Trump’s televised address to the nation, following losses recorded in the previous session.

Energy prices surge on Trump comments

Oil prices surged after Trump said the U.S. military would intensify its campaign against Iran over the next two to three weeks, repeating that Tehran must not be allowed to acquire a nuclear weapon. He added that talks were still underway, but gave no indication that a ceasefire was imminent.

“The month clearly belonged to energy. Brent crude rose 41.2 percent and WTI 48.7 percent, but the real stress was seen further down the barrel where gasoil surged 67.0 percent, New York ULSD 63.4 percent, and RBOB gasoline 38.1 percent. In other words, this was not simply an oil rally. It was a broad repricing of the fuels needed to keep economies moving,” said Ole Hansen, Head of Commodity Strategy, Saxo Bank.

“The outperformance of refined products versus crude underlined the extent to which the market was pricing immediate scarcity in usable fuels, not just a theoretical geopolitical premium on oil in the ground,” he added.

U.S. crude stockpiles rise

Oil prices had been pressured on Wednesday and early Thursday after Trump told reporters the U.S. could withdraw from Iran within two to three weeks, even in the absence of a formal deal.

Those remarks raised hopes of a possible easing in the conflict, leading markets to scale back some of the geopolitical premium that had helped push crude to multi-month highs in March.

Earlier, Trump said in a social media post that Iran’s new regime president had asked for a ceasefire, hinting at a potential diplomatic opening. Iran, however, rejected the claim, with state media reporting on Wednesday that no truce had been requested.

On the supply front, the Energy Information Administration said U.S. crude stockpiles increased by around 5.5 million barrels in the week ended March 27, coming in well above expectations for only a slight build.