Growing tensions in the Middle East cause oil to climb ahead of important central bank meetings.

31 Oct 2023 , 09:23 AM

Tuesday’s early Asian trading saw an increase in oil prices as tensions in the Middle East persisted and ahead of meetings of the world’s central banks.

U.S. West Texas Intermediate crude increased 33 cents, or 0.4%, to $83.64 a barrel, while Brent crude futures increased 46 cents, or 0.53%, to $87.91 a barrel.

Monday saw a more than 3% decline in oil prices as Israel’s bombardment on Gaza intensified, despite dwindling concerns that the conflict between Israel and Hamas will impede regional supplies.

Three days after it started ground operations in the Palestinian territory, Israeli tanks and troops launched an eastward and westward assault on Gaza’s key northern metropolis on Monday.

Due to this week’s main central banks’ rate-setting meetings, traders were also closely monitoring global monetary policy.

The Bank of Japan (BOJ) will meet first on Tuesday, when it is expected to consider more adjustments to its bond yield curve control (YCC) and update its inflation predictions.

Nikkei, which claimed that policymakers may further alter the YCC to allow the yield on the 10-year Japanese government bond to soar over 1%, citing people close to the topic, stoked speculation on Monday that the BOJ might take action.

The Bank of England and the U.S. Federal Reserve will meet on Thursday and Wednesday, respectively, to debate monetary policy and make decisions about potential future interest rate hikes that could cause inflation. Interest rates are predicted to remain steady by the Fed.

Investors are also anticipating data from Taiwan and Hong Kong’s third-quarter GDP and purchasing managers index for China.

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