Oil jumps as Bahrain, Egypt, Saudi Arabia, UAE cut diplomatic ties with Qatar

Oil jumped after Saudi Arabia, Egypt, the United Arab Emirates (UAE) and Bahrain cut ties with Qatar on Monday while sterling slipped after the weekend attacks in London that killed at least seven people and wounded 48, just days before Britain’s general national election.

SINGAPORE — Oil jumped after Saudi Arabia, Egypt, the United Arab Emirates (UAE) and Bahrain cut ties with Qatar on Monday while sterling slipped after the weekend attacks in London that killed at least seven people and wounded 48, just days before Britain’s general national election.

The coordinated move by the Middle Eastern countries, accusing the wealthy Gulf Arab state of supporting terrorism, dramatically escalates a simmering dispute over Qatar’s support for the Muslim Brotherhood, the world’s oldest Islamist movement.

Saudi Arabia is the world’s biggest exporter of crude oil. Abu Dhabi in the UAE is also a major oil exporter.

Qatar is the biggest supplier of liquefied natural gas (LNG) and a major seller of condensate — a low-density liquid fuel and refining product derived from natural gas.

Global benchmark Brent advanced 1.10% to $50.48 a barrel, while US oil climbed 1% to $48.17.

Dubai’s stock index dropped 0.60% in early trade.

Sterling fell as much as 0.30% before paring the losses to trade down 0.20% at $1.2868 on Monday. Attackers rammed a van into pedestrians on London Bridge on Saturday and then stabbed revelers in nearby bars.

Police shot dead three male assailants in London’s Borough Market within eight minutes of receiving the first emergency call, and have since detained several people.

But British stocks are unlikely to see much adverse impact from the third terrorist attack in the country in as many months, with financial spreadbetter CMC Markets expecting the FTSE 100, which touched a record high on Friday, to open slightly higher. Prime Minister Theresa May said Thursday’s election would go ahead as planned. Polls now show the election is much tighter than previously predicted. A close election could throw Britain into political deadlock just days before formal Brexit talks with the European Union are due to begin on June 19.

“Today and tomorrow, I am guessing that sterling will move in a range ahead of the UK election, as I think no one can accurately forecast the outcome,” said Masashi Murata, currency strategist for Brown Brothers Harriman. “Brexit has taught us not to believe polls and not to take aggressive positions ahead of UK events.”

MSCI’s broadest index of Asia-Pacific shares outside Japan reversed losses to climb 0.10%. Japan’s Nikkei added 0.10% as the yen surrendered some gains. Chinese shares fell 0.50%, with news of service- sector activity rising in May at the fastest pace in four months failing to lift sentiment. Australian shares slid 0.80% and South Korea’s KOSPI was little changed.