Feb. 19 (UPI) -- Middle East tensions, pitting Israel against Iran, added a geopolitical risk premium to the price of oil in a Monday session thinned by a U.S. federal holiday.
Speaking at a security conference in Munich during the weekend, Israeli Prime Minister Benjamin Netanyahu -- holding a piece of wreckage said to be from an Iranian drone shot down by Israeli forces earlier this month -- said his patience was wearing thin.
Pointing to a U.N.-backed agreement that pulls Iran back from its nuclear research program in exchange for oil-related concessions, the prime minister said Tehran is an emboldened aggressor in the region.
"We will act without hesitation to defend ourselves," he said in his remarks. "And we will act, if necessary, not just against Iran's proxies that are attacking us, but against Iran itself."
On Monday, the partners behind two of the largest natural gas fields offshore Israel signed a $15 billion agreement to send reserves to Egypt.
Last month, U.S. President Donald Trump helped add a premium to the price of oil before signing off on the waivers that hold the U.N. nuclear agreement together. Not issuing the waivers could've pulled the millions of barrels of oil off a market with little room for risk.
The price for Brent, the global benchmark, topped $70 per barrel last month on the back of geopolitical risk and optimism over compliance with an effort by the Organization of Petroleum Exporting Countries to balance an oversupplied market with coordinated production cuts.
The $70 threshold, however, came under pressure from steady gains in oil production from the United States, now an exporter in its own right.
Last week, the American Petroleum Institute, the U.S. trade group, reported total U.S. crude oil production averaged 10.2 million barrels per day, the highest monthly level in its records and a 15.1 percent increase year-over-year.
While normally sending the price of oil lower, API reported total U.S. petroleum demand last month increased 5.5 percent from last year for its strongest January in more than a decade.
U.S. markets are closed Monday in observance of President's Day.