Oil jumps over 2% amid Red Sea vessel attacks

Oil climbed more than 2% on Tuesday to its highest level this month, as further attacks on ships in the Red Sea prompted fears of shipping disruptions and on hopes of interest rate cuts that could boost economic growth and fuel demand.

Brent crude futures settled $2, or 2.5%, higher at $81.07 a barrel, after rising as much as 3.4% during the session. US West Texas Intermediate crude rose by $2.01, or 2.7%, to $75.57, reports Reuters.

The rally, in thin trade with some markets closed for holidays, added to last week's gains of about 3% after Houthi attacks on ships worried investors and as the violence in Gaza showed no sign of easing.

"There's plenty of geopolitical tensions today in terms of the Middle East ... and it has given some angst here to the security of the transit of oil and other goods," said John Kilduff, partner with Again Capital LLC.

Yemen's Iran-backed Houthi militia claimed responsibility for a missile attack on Tuesday on a container ship in the Red Sea, and for an attempt to attack Israel with drones.

/MHK/