Oil prices rose further on Monday, driven by growing concerns over potential supply disruptions from Middle East producers as Israel intensified its attacks on Iranian-backed forces in the region.
Brent crude futures for November delivery climbed by 51 cents, or 0.71%, to $72.49 per barrel as of 0330 GMT, ahead of the contract’s expiration later in the day. The more-active December contract also saw a gain of 50 cents, or 0.7%, reaching $72.04.
Meanwhile, U.S. West Texas Intermediate (WTI) crude futures increased by 43 cents, or 0.63%, to $68.61 per barrel.
Oil prices edged higher on Monday, supported by escalating tensions in the Middle East, despite last week’s losses driven by global demand concerns. Brent crude futures for November rose by 51 cents, or 0.71%, to $72.49 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 43 cents, or 0.63%, to $68.61 a barrel.
Last week, Brent and WTI fell by about 3% and 5%, respectively, as investor confidence faltered after China’s fiscal stimulus measures failed to alleviate demand worries. China is the world’s second-largest economy and top oil importer.
However, the potential for a broader conflict in the Middle East, involving key oil producer Iran, boosted prices on Monday. Concerns grew after Israel intensified its military actions against Iranian-backed groups, including Hezbollah in Lebanon and Houthi militants in Yemen.
“While oversupply remains a concern, fears of an expanding Middle Eastern crisis disrupting supplies from major producers are driving market anxiety,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Israel expanded its regional confrontations, bombing Houthi targets in Yemen after killing Hezbollah leader Sayyed Hassan Nasrallah in Lebanon last week. In response to growing tensions, U.S. Defense Secretary Lloyd Austin authorized additional military deployments to the region, warning Iran and its proxies of potential retaliation if U.S. interests were targeted.
Market analyst Tony Sycamore of IG noted that oil prices would remain influenced by the ongoing supply-demand balance. He also warned that WTI prices could test 2021 lows around $61 to $62 a barrel, with OPEC+’s voluntary supply cuts set to end on December 1.
Amid global geopolitical tensions, traders are also watching for signals from U.S. Federal Reserve Chair Jerome Powell, who is expected to provide further insight into the central bank’s monetary policy outlook later in the day. Seven other Federal Reserve policymakers are also scheduled to speak throughout the week.
