Oil rates surge due to increasing supply concerns in Middle East
Date
9/23/2024 9:20:03 AM
(MENAFN) Oil prices edged higher on Monday due to rising concerns that escalating conflict in the Middle East could disrupt regional oil supplies, coupled with optimism over the recent US interest rate cut. International benchmark brent crude rose by 0.16 percent to USD73.81 per barrel, while US benchmark West Texas Intermediate (WTI) climbed by 0.17 percent to USD71.12 per barrel. These gains came after Brent and WTI closed slightly lower in the previous trading session.
Market participants are particularly concerned about the ongoing tensions between Israel and Hezbollah in Lebanon, which could potentially affect oil production in the region, home to some of the world’s largest oil reserves. The situation has intensified following an Israeli airstrike on Beirut, killing 45 people and injuring 68, according to Lebanon’s Health Ministry. In retaliation, Hezbollah bombed Israeli military-industrial targets, heightening fears of a broader conflict.
The escalation between Israel and Hezbollah comes on the heels of the Israeli war on Gaza, which began after a Hamas cross-border attack on October 7 of the previous year. The conflict has claimed over 41,400 lives, mostly women and children, as the violence between these groups continues to destabilize the region. This heightened geopolitical risk is pushing oil prices higher, as any significant disruption in the Middle East could have far-reaching consequences for global oil supply.
In addition to geopolitical concerns, oil prices are being buoyed by the US Federal Reserve’s recent interest rate cut. Last week, the Fed lowered rates by 50 basis points to a range of 4.75 percent-5.0 percent, marking its first cut in more than four years. The move is expected to stimulate economic activity, which could lead to higher oil demand, further supporting prices.
MENAFN23092024000045015839ID1108704422
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.