Oil prices rise, recovering some of the 7% drop from last week
The oil prices increased on Monday as the Middle East conflict continued and markets were worried about the supply of crude from the region.
Brent crude futures rose 58 cents or 0.79% to $73.63 per barrel at 11:02 am ET. ET (15:02 GMT). U.S. West Texas Intermediate Crude Futures were up 67 cents or almost 1% at $69.89 per barrel.
Brent closed the week more than 7% down, while WTI fell around 8%. These were the biggest weekly drops since September 2, due to a slowdown in economic growth in China, and lower risk premiums in Middle East.
Medical personnel reported that Israeli forces besieged shelters and hospitals for the displaced in northern Gaza Strip as they intensified operations against Palestinian militants. Israel also conducted targeted strikes against sites in Lebanon belonging to Hezbollah’s financial arm.
The State Department announced that U.S. Secretary Antony Blinken would make another effort for a ceasefire as he travels to the Middle East Monday. He hopes to jump-start negotiations in order to end the Gaza War and defuse spillover violence into Lebanon.
Two sources have confirmed that U.S. ambassador Amos Hochstein is scheduled to meet with Lebanese officials on Monday in Beirut, where they will discuss the conditions of a ceasefire agreement between Israel and Hezbollah.
Dennis Kissler said that the crude futures were gaining this morning due to the escalating fighting in Middle East. Israel was also preparing more retaliatory strikes, likely against Iran.
He added that the sell-off of crude oil over the last two weeks was mainly due to long-term liquidation, as the crude markets continue to seek an equilibrium between the slowing demand in the Middle East and the continued unrest.
China cut its benchmark lending rate on Monday as expected, as part of a wider package of measures to stimulate the economy.
The data released on Friday shows that China's economy has grown at its slowest rate since the beginning of 2023, which is fueling concerns over oil demand.
China's oil consumption growth will remain low in 2025, despite the recent stimulus measures taken by Beijing. The world's No. 2 economy electrifies and slows down its growth rate, according to the International Energy Agency.
Saudi Aramco CEO said at an energy conference held in Singapore, on Monday, that he is still "fairly optimistic" about China's oil consumption in light of increased policy support to boost growth and the rising demand for liquid-to chemicals and jet fuel.
The U.S. Energy Information Administration reported last week that the weekly oilfield production increased by 100,000 barrels a day, to a new record of 13.5 million bpd for the week ending Oct. 11. (Additional reporting from Robert Harvey in London and Colleen Waye in Beijing. Editing by Jan Harvey David Evans, Ros Russell.
(source: Reuters)
