Oil prices surged on Monday amid concerns of potential disruptions in regional oil supplies due to the escalating conflict in Gaza. Additionally, the anticipation of imminent U.S. interest rate cuts has boosted the global economic outlook and fuel demand.
Crude oil futures rose by 0.5%, with WTI reaching $79.39 a barrel and Brent at $75.19 a barrel by 2300 GMT.
The recent clashes between Hezbollah and Israel have raised fears of a wider regional conflict involving Iran and the United States, resulting in increased oil prices.
Analysts predict a strong market opening as oil prices aim to hit $80.00 following Israel’s pre-emptive strike on Lebanon to prevent an attack from Hezbollah.
Last week, both oil benchmarks saw a 2% increase after U.S. Federal Reserve Chair Jerome Powell hinted at upcoming interest rate cuts, boosting sentiment across the commodity complex.
Despite the positive news, oil prices had faced downward pressure due to concerns about weak fuel demand in major economies.
The U.S. Energy Department recently purchased 2.5 million barrels of oil to replenish the Strategic Petroleum Reserve, while the number of operating U.S. oil rigs remained unchanged at 483, as reported by Baker Hughes.
In conclusion, the ongoing Gaza conflict and potential interest rate cuts in the U.S. have significantly impacted oil prices. Investors should monitor these developments closely as they can have a direct effect on global financial markets and individual portfolios.