Crude Climbs in Early Trading

29 Jul 2024 , 10:01 AM

Fears of a growing Middle East conflict following a rocket strike in the Israeli-occupied Golan Heights, which Israel and the US blamed on the Lebanese militant group Hezbollah, caused oil prices to rise on Monday, reversing the previous week’s loss.

Brent crude futures increased by 20 cents, or 0.3%, to $81.33 a barrel. West Texas Intermediate (WTI) oil futures for the United States increased by 9 cents, or 0.1%, to $77.25 a barrel.

WTI dropped 3.7% and Brent lost 1.8% last week due to declining Chinese demand and expectations of a ceasefire in Gaza.

The administration of Prime Minister Benjamin Netanyahu was given permission by the Israeli security cabinet on Sunday to choose the “manner and timing” of a reaction to the missile attack that killed twelve teenagers and children in the Golan Heights on Saturday.

The bloodiest attack in Israel or Israeli-annexed territory since Palestinian militant group Hamas’ Oct. 7 assault that ignited the Gaza War, was denied by Iran-backed Hezbollah. There is a chance that this battle, which has multiple fronts, will turn into a larger regional conflict.

Israel has threatened to avenge Hezbollah in Lebanon, and on Sunday, Israeli jets attacked sites in the country’s south.

The likelihood of a ceasefire in Gaza has increased within the last two weeks.

However, a deal to end nine months of fighting that have destroyed the enclave is complicated by Israel’s demands for adjustments to a plan for a Gaza truce and the release of Hamas hostages, according to two Egyptian, one Palestinian, and a Western official.

Concerns have been raised regarding China’s wider demand outlook, as the country is the world’s largest importer of crude oil, following the release of statistics earlier this month that showed China’s total fuel oil imports decreased 11% in the first half of 2024.

In the meantime, energy services company Baker Hughes reported in its widely watched report on Friday that U.S. energy companies increased the number of oil and natural gas rigs last week for the second consecutive week, increasing the monthly total by the most since November 2022.

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