Oil prices jump on drone attack on Saudi Aramco facilities

Oilpricesrose on Tuesday after the world's topoilexporterSaudiArabia said explosive-ladendrones had attacked two pumping stations belonging to stateoilcompanyAramco.

Brent crude futures were at $70.79 a barrel at 1035 GMT, up 56 cents or 0.80%.

The USWest Texas Intermediate (WTI) crude futures were at $61.35 per barrel, up 31 cents or 0.51%.

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TheSaudistate news agency quoted Energy Minister Khalid al-Falih as saying thatAramcohad halted pumping on the East-West pipeline until the damage was evaluated, but that production and exports were continuing without disruptions.

Falih said theattackwas an "act of terrorism" that targeted the world's globaloilsupply.

SaudiArabia said earlier that two of itsoiltankers were among thoseattacked off the coast of the United Arab Emirates on Sunday, incidents which ratcheted up tensions in the world's topoilexporting region.

A USofficial said Iran was the likely culprit, but Iranian officials denied responsibility for the incident.

A television station run by Yemen's Houthi group said on Tuesday the Iran-aligned movement had launcheddroneattacks on Saudi installations, without identifying the targets or time of theattacks.

Tehran has been embroiled in an escalating war of words with the United States over stricter USsanctions, which have cut its oil exports and tightened global supply.

A fifth of globaloilconsumption passes through the Strait of Hormuz from the Middle East crude producers to global markets.

The market was also holding out some hope for flagging US-China trade talks as both sides expressed positive sentiments which may signal that the negotiations are not yet dead.

"The brinkmanship between Washington and Beijing is now seen as a significant hurdle to the growth in globaloildemand. Meanwhile, rising geopolitical tensions in the Middle East will further promote volatility."

The negotiations between the United States and China appeared headed towards success last week but have largely unravelled over USaccusations that Beijing sought vast, last-minute changes.

China on Monday ignored a warning from USPresident Donald Trump and moved to impose higher tariffs on a range of USgoods including frozen vegetables and liquefied natural gas.

But the Chinese government's top diplomat, State Councillor Wang Yi, indicated on Monday that Beijing hoped for a compromise: "Both countries' negotiating teams have the ability and wisdom to resolve each other's reasonable demands."

Trump on Monday said he expected to speak to Chinese President Xi Jinping at a G20 summit in late June and have "probably a very fruitful meeting".

"The US president's comments likely tilted the balance in favour of the optimists, who continue to expect a rapprochement despite last week's major setback in trade negotiations," analyst Vandana Hari of Vanda Insights said.