Oil recovers from 7-week low after Israeli strike on Hezbollah

(MENAFN) Oil futures recovered some ground on Wednesday, rebounding from seven-week lows as geopolitical tensions escalated following an Israeli strike on Hezbollah. Despite this uptick, prices remained under pressure due to ongoing concerns about demand in China.

Brent crude futures increased by 39 cents, or 0.5 percent, reaching USD79.02 a barrel by 00:20 GMT ahead of their expiration on Wednesday. The more active October contract rose 47 cents to USD78.54, according to a UK news agency. Similarly, U.S. West Texas Intermediate (WTI) crude futures climbed 52 cents, or 0.7 percent, to USD75.25 a barrel. On Tuesday, both Brent and WTI had fallen around 1.4 percent, hitting their lowest levels in seven weeks.

Middle Eastern tensions have been rising as the Israeli government claimed responsibility for killing the top commander of the Hezbollah militia in an airstrike on Beirut, Lebanon, on Tuesday. This action was in retaliation for a cross-border rocket attack on Israel on Saturday, heightening regional instability.

Despite the recent rebound, Brent and WTI are on track to post their largest monthly losses in July since 2023. Oil prices have been pressured by persistent concerns about the demand outlook in China, optimism over a potential ceasefire in Gaza, and speculation that OPEC+ might deviate from its current plan to start easing production cuts from October during its meeting this week, as noted by IG analyst Tony Sycamore in a report.

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