By Laura Sanicola
(Reuters) – Oil prices rose on Tuesday amid rising tensions in the Middle East after Israel’s military chief said his country would respond to Iran’s missile and drone attack at the weekend, amid calls of moderation on the part of the allies.
futures for June delivery rose 46 cents, or 0.5%, to $90.56 a barrel at 0005 GMT. futures for May delivery rose 43 cents, or 0.5%, to $85.84 a barrel.
Oil prices ended Monday’s session lower after Iran’s attack on Israel proved less damaging than expected, initially easing concerns of a rapidly escalating conflict that could shift barrels of crude.
The attack, which Iran said was retaliation for an airstrike on its consulate in Damascus, caused only modest damage, with the missiles shot down by Israel’s Iron Dome defense system.
But Israeli Prime Minister Benjamin Netanyahu on Monday convened his war cabinet for the second time in less than 24 hours to consider how to respond to Iran’s first direct attack on Israel, a government source said. This has raised concerns in the market that the retaliatory measures could impact oil supply.
Iran produces more than 3 million barrels per day of crude oil as a major producer within the Organization of the Petroleum Exporting Countries (OPEC).
Benchmarks had risen on Friday in anticipation of Iran’s retaliation, with prices rising to their highest levels since October.
In China, the world’s biggest oil importer, official gross domestic product data, released on Tuesday, is expected to show growth slowing to 4.6% year-on-year from 5.2% in the previous three months. This would keep pressure on politicians to unveil further economic stimulus measures that could boost oil prices.