KUALA LUMPUR (Reuters) – Oil prices surged on Tuesday as fears of supply disruptions in the Middle East due to escalating conflict between Israel and Hezbollah, combined with the threat of a tropical storm impacting U.S. output, sent shockwaves through the market.
Crude oil futures for November delivery were up 0.3% at $74.11 a barrel, while Brent futures for November rose by 0.3% to $70.61.
The market saw a decline on Monday as worries about demand overshadowed positive sentiment, with concerns about euro zone business activity and Chinese fuel consumption lingering in investors’ minds.
Israel’s military conducted airstrikes on Hezbollah sites in Lebanon, resulting in casualties and mass displacement. The conflict between the two parties escalated following recent incidents, raising concerns about regional stability and oil production.
Meanwhile, U.S. oil producers began evacuating personnel from Gulf of Mexico platforms as a potential tropical storm in the Gulf threatened to develop into a hurricane, posing risks to offshore production facilities.
The U.S. National Hurricane Center warned of a storm forming near Cuba that could strengthen into a hurricane and move across the Gulf of Mexico, potentially impacting oil operations in the region.
Analysis:
The recent events in the Middle East and the U.S. Gulf Coast have created uncertainty in the oil market, leading to price fluctuations. The escalating conflict between Israel and Hezbollah, as well as the threat of a tropical storm in the U.S., have raised concerns about supply disruptions and production risks.
Investors should closely monitor developments in these regions to assess the potential impact on oil prices and market stability. Any disruptions to supply chains or production facilities could have significant repercussions on global oil markets and energy prices.
