Oil prices rise:Oil prices rose nearly 2 percent on Monday, recovering some of last week’s more than 7 percent drop, as fighting in the Middle East and expected Israeli retaliation against Iran continued, worrying markets about the supply from the region.
Brent crude futures rose $1.23, or 1.68 percent, to $74.29 a barrel, while U.S. West Texas Intermediate crude futures rose $1.34, or 1.94 percent. percent, at $70.56 a barrel.
Brent closed down more than 7 percent last week, while WTI lost about 8 percent. Those were the biggest weekly declines in contracts since Sept. 2, due to slowing economic growth in China and falling risk premiums in the Middle East.
Israeli forces laid siege to hospitals and shelters for displaced people in the northern Gaza Strip on Monday, medics said, as they stepped up operations against Palestinian militants. Israel also carried out targeted attacks against sites belonging to Hezbollah’s financial arm in Lebanon.
US Secretary of State Antony Blinken will make another push for a ceasefire when he heads to the Middle East on Monday, the State Department said, seeking to start negotiations to end the Gaza war and also defuse the conflict. in Lebanon.
US envoy Amos Hochstein will hold talks with Lebanese officials in Beirut on Monday about conditions for a ceasefire between Israel and Hezbollah, two sources told Reuters.
“Oil futures have rallied this morning as escalating fighting in the Middle East continues…Israel is also preparing for more retaliatory attacks likely against Iran,” said Dennis Kissler, senior vice president of trading at BOK Financial.
“The sell-off in crude oil over the past two weeks was mainly due to a prolonged sell-off as the crude oil market continues to seek a balance between slowing demand and continued unrest in the Middle East,” he added.
China cut benchmark interest rates as anticipated on Monday, as part of a broader package of stimulus measures to revive the economy.
Data on Friday showed China’s economy grew at the slowest pace since early 2023 in the third quarter, fueling growing concerns about oil demand.
China’s oil demand growth is expected to remain weak in 2025 despite Beijing’s recent stimulus measures, as the world’s second-largest economy electrifies its auto fleet and grows at a slower pace, it said on Monday. the head of the International Energy Agency.
Saudi Aramco’s chief executive told an energy conference in Singapore on Monday that he was still “quite optimistic” about China’s oil demand in light of increased policy support aimed at boosting growth and rising fuel demand for airplanes and liquid chemicals.
Meanwhile, Federal Reserve Bank of Minneapolis President Neel Kashkari repeated Monday that he expects “modest” interest rate cuts in the coming quarters, although a sharp weakening of labor markets could lead him to advocate for cuts. of faster rates.
Lower interest rates reduce the cost of borrowing, which can stimulate economic activity and boost oil demand.
The U.S. Energy Information Administration said last week that weekly oilfield production rose by 100,000 barrels per day to a record 13.5 million bpd during the week ending Oct. 11.
U.S. crude oil stockpiles likely rose by about 100,000 barrels last week, while distillate and gasoline inventories fell, a preliminary Reuters poll showed on Monday.
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