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By Trend

Oil prices rose on Monday to extend gains from last week, bolstered as tensions remain high between Iran and the United States after U.S. Secretary of State Mike Pompeo said “significant” sanctions would be announced on Tehran, reports Trend citing to Reuters.

Brent futures were up 50 cents, or 0.8%, at $65.70 a barrel by 0655 GMT.

West Texas Intermediate crude was up 70 cents, or 1.2%, at $58.13 a barrel.

U.S. President Donald Trump said last week that he called off a military strike to retaliate for Iran’s downing of an unmanned U.S. drone, and he said on Sunday that he was not seeking war with Iran.

But Pompeo also said “significant” sanctions on Iran would be announced on Monday aimed at further choking off resources that Tehran uses to fund its activities in the region.

“There’s a very firm tone to trading on well above average volumes,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“We’ve got concerns about the sanctions against Iran, (but) we are seeing a better demand picture because of the actions of central banks, which is benefiting all commodities ... and we have got a weaker U.S. dollar.”

Oil is usually priced in dollars, so a weaker greenback makes it cheaper for holders of other currencies.

The U.S. Federal Reserve is expected to cut interest rates soon to bolster the U.S. economy, while the European Central Bank President Mario Draghi last week called for additional stimulus to boost growth.