Oil prices rebound amid Middle East tensions, market volatility
Date
7/29/2024 4:09:15 AM
(MENAFN) Oil prices rose in early trading on Monday, offsetting some of the losses from the previous week, as fears of a widening conflict in the Middle East increased following a rocket attack on the Israeli-occupied Golan Heights. Israel and the United States have blamed Lebanon's Hezbollah for the attack, which has heightened geopolitical tensions.
By 0010 GMT, brent crude futures had climbed by 20 cents, or 0.3 percent, to USD81.33 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures increased by 9 cents, or 0.1 percent, to USD77.25 per barrel. Last week saw Brent crude lose 1.8 percent, while WTI fell by 3.7 percent, primarily due to weak demand from China and hopes for a ceasefire agreement in Gaza.
On Sunday, the Israeli Security Cabinet granted Prime Minister Benjamin Netanyahu the authority to decide on the "method and timing" of a response to the Saturday rocket attack on the Golan Heights, which resulted in the deaths of 12 children and teenagers. Despite Hezbollah's denial of responsibility for the attack—the deadliest incident in Israel or its annexed territory since a Hamas offensive on October 7—the situation remains tense. The conflict has spread to multiple fronts, raising concerns about a potential regional war. In retaliation, Israeli aircraft bombed targets in southern Lebanon on Sunday.
Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that "concerns over escalating tensions in the Middle East prompted fresh buying, but gains were limited by ongoing concerns over weak demand in China." Over the past few weeks, hopes for a ceasefire in Gaza have been gaining momentum. However, Israel's desire to make changes to the Gaza truce plan and secure the release of hostages held by Hamas has complicated efforts to finalize a deal to end nearly nine months of fighting. Israel's military campaign in the Gaza Strip has caused significant destruction in the Palestinian enclave.
Overall, the rise in oil prices reflects the market's reaction to the dual influences of geopolitical instability in the Middle East and fluctuating demand from China, underscoring the complexity and volatility of the current economic landscape.
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