Tension between Iran and Israel keeps oil market on edge

HONG KONG

Oil prices rallied Tuesday after Donald Trump urged Tehran residents to evacuate, stoking fresh fears of all-out war as Israel and Iran continued to pound each other with missiles.

Hopes that the deadly conflict can be contained helped most equities rise, while the U.S. president's earlier claim that the Islamic republic wanted to make a nuclear deal also provided a little optimism.

After June 13’s surge sparked by Israel's attacks on its regional foe, crude ticked more than 1 percent lower on June 16 as traders bet that the battle would not spread throughout the Middle East and key oil sites were mostly left untouched.

But prices edged back up after Trump took to social media calling for the evacuation of the Iranian capital.

Oil prices spiked around 2 percent yesterday before paring some of those gains, but the comments kept investors on edge amid warnings that an escalation of the crisis could send the commodity soaring again.

As Israel and Iran attack each other the fear remains that a wider war could constrict the flow of Iran’s oil to its customers. That in turn could raise gasoline prices worldwide and keep them high, though spikes in prices from previous conflicts have been brief.

Crude jumped 7 percent late last week after Israel’s attack on Iranian nuclear and military target.

The price of gold receded after jumping on June 13, when investors were looking for someplace safe to park their cash . An ounce of gold fell $14.60 to $3,402.40 per ounce.